Irrevocable Trust

An irrevocable trust is one that cannot be modified without permission of the beneficiary. The same is true of terminating the trust. When an irrevocable trust is made, nothing can be done to change or end the stipulations of the trust unless permission is directly granted by the named beneficiary. This means that even though the creator and grantor of the trust originally held responsibility for any of the assets or estate(s) mentioned in the trust, they have effectively signed them over when placing them into an irrevocable trust.

There are pros and cons to transferring your assets into a trust that is not revocable. For example, all incidents of ownership are removed when estate assets are put into an irrevocable trust. This essentially releases the grantor's responsibility to pay taxes on the estate. Furthermore, there will be no tax liability on any income that could be generated by these assets, because technically they are no longer in your name. For many, these tax benefits are more than enough incentive to place their assets in an irrevocable trust. However, for others the inability to modify the conditions or terminate their trust in any way are nonnegotiable. A probate lawyer can help you decided if an irrevocable trust is the right decision for you.