Get your trust knowledge level up! Learn about Asset Protection, Grantors, Trustees, and Beneficiaries for tax purposes, transferring assets to an independent Trustee, trusts and Estate Tax and trusts with 1031 exchanges...
The use of trusts in asset protection is quite popular but the distinctions between a revocable and irrevocable trust are important to understand. In an irrevocable trust, possession of the asset is transferred to an independent trustee; the original possessor is no longer tied to them. Thus, for 1031 exchange purposes the irrevocable trust has a separate tax identification number. Therefore, in compliance with the same taxpayer rule, a revocable trust can be used interchangeably with personal ownership but an irrevocable trust cannot.
For a table depicting the differences, click here.