Question

Please answer the following questions:

1. Why would anyone want to set up a trust?

2. What is the difference between a revocable and irrevocable trust?

3. Why would anyone set up an irrevocable trust for their children and name someone else as the trustee?

Answer 1

Answer :

1) one should want to set up trust to run the business and share profit of the trust to their beneficiary

Flexibility in distribution of profit to members

Taxed as individuals income

2) here the difference is in case of revocable trust is asset will remain in grantor estate on the other hand in case of irrevocable trust it will move out of grantor estate

3) for children it is beneficial to set up irrevocable trust as not being able to revoke the property

Thank you hope this helps you