Irrevocable Trusts

When you move your taxable assets into an Irrevocable Trust, it may reduce your tax liability, which is typically more beneficial for those with large estates. The Trust also provides protection to its assets, including from creditors, judgments, and divorce. People employed in highly-litigious professions are most likely to use an Irrevocable Trust for this purpose. Finally, it is a useful estate-planning tool when you are providing for a family member with special needs. In this case, it is often referred to as an Irrevocable Special Needs Trust, and it allows a beneficiary with a disability to receive funds for their living expenses without that income disqualifying them from receiving government benefits. 

Changing the terms of an Irrevocable Trust is not easy, unless all parties (trustee and beneficiaries) are on board. If you desire to maintain control over your assets, an Irrevocable Trust may not be the best choice. 

In limited circumstances and jurisdictions, it may be possible to terminate an Irrevocable Trust when all parties (trustee and beneficiaries) agree to do so. Modification or termination of an Irrevocable Trust may also occur following a judge's order. Judges are more inclined to make these changes or terminate an Irrevocable Trust when it is obvious that the purpose of the Trust cannot be fulfilled, has become illegal, or is defeated by compliance with the terms of the Trust. Otherwise, Irrevocable Trusts will end naturally following the established terms. This is typically dependent upon an event, such as the death of the person who created the Trust, or a specified end date.