An irrevocable trust is an instrument created by a person called a settlor and managed by a trustee for the benefit of beneficiaries. In Texas, the same person can hold multiple titles under the trust. Unlike revocable living trusts, though, the trust is generally irrevocable.
Irrevocable trusts are created much less often than revocable living trusts. They are primarily used as creditor protection tools. Other benefits include avoiding probate and the ease of succession to manage property after the settlor dies.
Irrevocable trusts do not qualify for the exception to the due on sale clause on mortgages. This means that settlors must consider the possibility that a lender may foreclose on your home if you transfer it into an irrevocable trust. Additionally, the settlor will use the homestead exemption and homestead protection on his principal residence.
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