Irrevocable trust

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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.

References in periodicals archive ?
An individual placing assets in an irrevocable trust cannot later reclaim the assets or make significant changes to their disposition.
The shareholder has committed to transfer the shares of Herky Hawk that he will receive in exchange for his shares of Banks to an irrevocable trust with an independent trustee approved by the Board immediately on consummation of this proposal.
Estate planning options here include transfer of ownership of the policy to someone else -- say, a responsible adult child--or formation of an irrevocable trust to own the policy.
For Medicaid-planning purposes, he generally proposes an irrevocable trust to protect one's home from Medicaid's asset recovery process and an irrevocable family investment agreement, a sort of all-in-the-family annuity that shelters assets but still generates income.
In the private ruling, an irrevocable trust was established by a congregation to secure promised benefits to a rabbi.
Transferring life insurance policies to an irrevocable trust is a very popular estate planning technique.
The escrow holder, The Bank of New York, holds a separate irrevocable trust fund for the purpose of paying principal, interest and any redemption premium, when due, on the refunded bonds.
Rauenhorst (a beneficiary of Defendant Gerald Rauenhorst 1982 Irrevocable Trust f/b/o Children) and Mr.
By reregistering assets into the name of an irrevocable trust, he can transfer ownership and taxation to the trust entity.
Also, the IRA Conversion Plan provides a program to increase the after-tax size of an inheritance by using distributions for the purchase of life insurance inside an irrevocable trust; a Spousal Lifetime Support provides for needs of a surviving spouse through second-to-die insurance; a Flexible Irrevocable Trust covers estate-tax liquidity needs; and a Standby Trust addresses the uncertainties of the estate-tax phaseout by allowing an insured couple to put off placing a survivorship policy into an irrevocable life insurance trust until after the first spouse's death.
Upon the wife's death, the revocable trust was split into two: (1) a revocable trust funded with the marital deduction amount and (2) an irrevocable trust that received the balance, including the residence.
That met his retirement needs and also provided funds to purchase an insurance policy in an irrevocable trust for his heirs to replace the value of the stock gifted to the CRT.