Irrevocable Living Trust

Trust usually created to achieve some tax benefit, or to provide a vehicle for managing assets of a person the creator believes cannot or should not be managing his or her own property. This trust cannot be changed or reversed by the creator of the trust.

Trust in which rights to make any changes therein are surrendered permanently by the Grantor. The grantor uses this type of trust to transfer assets and any potential depreciation out of his or her estate in order to avoid Federal Estate Tax on the second estate distributions to heirs, as well as to avoid Probate expenses. The primary disadvantage of this type of trust is that the grantor surrenders all control over the assets and the right to change the terms of the trust. See also Estate Planning Distribution; Revocable Living Trust.