Irrevocable trust

Irrevocable trust

A trust that is unable to be amended, altered, or revoked.

Irrevocable Trust

A trust into which a grantor deposits assets for use by a beneficiary where the terms of the trust cannot be modified or abrogated without permission of the beneficiary. That is, when a grantor sets up an irrevocable trust, he/she completely relinquishes ownership of the assets placed in the trust. As a result, an irrevocable trust is not usually considered part of the grantor's estate for estate tax purposes.

irrevocable trust

A trust in which the grantor gives up any right to amendments or termination. Income from an irrevocable trust is taxable to the beneficiary if disbursed or to the trust if not disbursed. Compare revocable trust.

Irrevocable trust.

An irrevocable trust is a legal agreement whose terms cannot be changed by the creator, or grantor, who establishes the trust, chooses a trustee, and names the beneficiary or beneficiaries.

The trust document names a trustee who is responsible for managing the assets in the best interests of the beneficiary or beneficiaries and carrying out the wishes the creator has expressed.

You typically use an irrevocable trust for the tax benefits it can provide by removing assets permanently from your estate.

In addition, through the terms of the trust you can exert continuing control over the way your property is distributed to your beneficiaries. Trusts have the additional advantages of being more difficult to contest than a will and more private.

If you establish an irrevocable trust while you're still alive, it's called a living or inter vivos trust. If you establish the trust in your will, so that it takes effect at the time of your death, it's called a testamentary trust.