ACC 565 WEEK 10 ASSIGNMENT 4,
Dear Mr. ZSE,
I hope you are doing well. As per our last meeting in which you had mentioned about forming a trust for your grandchildren and your confusion about it, I am writing this letter to you to inform you about certain things. I hope by the end of this letter, you will be able to find solution to your query.
Some Common Facts
The trust you had shown interest in was irrevocable trust so I will brief you about it by presenting some facts related to it. In irrevocable trust, the person forming the trust loses his ownership interest in the assets he aims to transfer to another party. The generator of the trust also loses the chance of revoking the trust provisions before finalizing it in an irrevocable trust. This makes irrevocable trust different from revocable trust along with other factors. You will not be able to reverse the provisions of this trust once they are decided. On the other hand, you will be able to transfer as much of your assets to your grandchildren as you like given that the trust have no limitation on that. This will enable you to save yourself from taxes on property. Irrevocable trust will also enable you to transfer $5 million to your grandchildren in future and this will be exempted from tax. You may also transfer up to $14000 to the trust annually which will not be taxed as well.
There are many issues with irrevocable trust. Clients forget that this type of trust is not