Irrevocable Trust

An irrevocable trust is a legal structure in which the grantor permanently transfers assets out of personal ownership. Because the grantor surrenders control, those assets may be removed from the taxable estate and, depending on structure and applicable law, shielded from future creditors. This deliberate loss of control is the mechanism behind the benefit — the two cannot be separated.

Irrevocable trusts appear throughout wealth planning at significant asset levels because the potential estate-tax savings grow alongside the assets placed inside. A hypothetical founder who transferred a minority stake in a private company into an irrevocable trust before a liquidity event might have removed substantial future appreciation from her estate entirely.

There are many varieties — GRATs, SLATs, and IDGTs among them — each with distinct rules about who benefits, when, and how. A common confusion is treating "irrevocable" as absolute; some trusts include limited modification powers under state law doctrines such as decanting or trust protector provisions. Whether any such flexibility is available in a given trust requires review by a qualified attorney familiar with the relevant jurisdiction.