What Is an Irrevocable Living Trust?

An irrevocable living trust is a type of estate planning tool that is used to pass assets on to beneficiaries. With this type of trust, once a grantor sets it up, it cannot be altered unless the beneficiary of the trust allows it. Once the assets are transferred into the trust, they cannot be removed. 

With this type of living trust, an individual can take advantage of tax benefits. Once their property is entered into the ownership of the trust, it is removed from their estate. This allows them to pass their estate onto beneficiaries without having to worry about paying estate taxes or gift taxes. 

With the irrevocable living trust, the individual can also get out of having to pay income taxes on any money that is generated from the assets in the trust. If an individual wants to be able to provide for their children or some other beneficiary, the irrevocable living trust can be a solid tool to use. With estate tax rates at high levels in most cases, this allows the majority of the estate to stay in tact instead of having to be partially distributed to the IRS to satisfy tax requirements.