How Do I List Trust Assets in a Prenuptial Agreement?
Full Question:
Answer:
Generally, assets placed in a trust belong to the trust and the trustee is the manager of the assets. The answer will depend on whether the trust is revocable or irrevocable. A trust is an entity which owns assets for the benefit of a third person (beneficiary). A living trust is an effective way to provide lifetime and after-death property management and estate planning. When you set up a living trust, you are the grantor; anyone you name within the trust who will benefit from the assets in the Trust is a beneficiary. In addition to being the grantor, you can also serve as your own trustee (original trustee). As the original trustee, you can transfer legal ownership of your property to the trust.
Trusts can be revocable or irrevocable. The revocable trust can be amended or discontinued at any time. An irrevocable trust cannot be modified or discontinued. A revocable living trust does not constitute a gift, so there are no gift tax consequences in setting it up. This trust may become irrevocable and unchangeable when the only person who can amend or revoke the trust dies or becomes incompetent.
The main difference between a revocable trust and an irrevocable trust is that with an irrevocable trust, the settlor (i.e. trust creator) maintains no control or interest in the trust. In a revocable trust, the assets within the trust are still within the reach and control of the trust creator. The individual who created a revocable trust maintains the ability to amend and the power of revocation and will maintain ultimate control of the property held in the trust. In contrast, with an irrevocable trust the settlor relinquishes all control of the trust and the assets it contains. Once an irrevocable trust is made, the creator of the trust maintains no control, has no power to revoke, and has no claim of ownership in the trust property.