Property OwnershipIntermediateDelaware Exam

What is an 'irrevocable trust' and how is real estate held in one?

AA trust that cannot be modified until the property is sold

BA trust that cannot be amended or revoked by the grantor — real property transferred into an irrevocable trust removes the asset from the grantor's estate (for tax purposes) with the trustee holding legal title for the benefit of beneficiariesCorrect

CA trust that only holds cash and stocks, not real property

DSimply a short-term, temporary holding arrangement used only while the property awaits its eventual sale, though the underlying details naturally shift somewhat depending on the county, the property type, and the specific facts of the transaction at hand

Why A trust that cannot be amended or revoked by the grantor — real property transferred into an irrevocable trust removes the asset from the grantor's estate (for tax purposes) with the trustee holding legal title for the benefit of beneficiaries Is Correct

Answer B: A trust that cannot be amended or revoked by the grantor — real property transferred into an irrevocable trust removes the asset from the grantor's estate (for tax purposes) with the trustee holding legal title for the benefit of beneficiaries

An irrevocable trust permanently transfers assets from the grantor's control. When real estate is transferred into an irrevocable trust, the trustee holds legal title.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

People Also Study

Key Terms to Know

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Easement

A non-possessory right to use another person's land for a specific purpose.