An irrevocable trust is a specialized tool of estate planning. In an irrevocable trust, the grantor creates a trust over which he releases the power of revocation. Since an irrevocable trust cannot be changed or altered without the consent of the beneficiary, the assets of an irrevocable trust are usually not included in the grantor’s estate. Irrevocable trusts are normally the vehicle for carrying out sophisticated tax planning techniques.

Irrevocable trusts reduce a grantor’s taxable estate or income taxes on the sale or transfer of highly appreciated assets. They are highly effective tools when properly structured and coordinated with the grantor’s overall estate plan. Use an irrevocable trust:

1. As a portion of your comprehensive estate plan set up by an irrevocable trust expert.

2. To give an established amount of money to children or grandchildren for a designated period of time.

3. To receive certain tax benefits only available through an irrevocable trust.

Action Steps
The best contacts and resources to help you get it done

Get irrevocable trust advice from specialists in irrevocable trusts

Because each state has its own rules and laws pertaining to irrevocable trusts, it's important to get the best advice before deciding this type of trust is right for you. Irrevocable trusts are complex and subject to both state laws and the IRS tax code.

I recommend: Visit Martindale.com and click on both the state in which you live and "Trusts and Estates" in the practice area section to find trust experts near you. Also, try Lawyers.com for state-by-state listings of lawyers who practice in the area of trust and estates.

Create irrevocable trust documents with online tools and resources

Although irrevocable trusts are extremely complex, the needed forms are relatively easy to produce with the right online tools. Do it yourself trusts are also a great resource when time is an issue and a trip to the attorneys office isn't possible.

I recommend: Public Legal Forms has a downloadable irrevocable trust agreement for a fee and Lectric Law has free online forms available for creating an irrevocable trust.

Work with irrevocable trust experts for tax benefits unique to irrevocable trusts

An irrevocable trust offers tax benefits not available in any other type of trust. However, these types of trusts are normally part of extremely complex estate planning. Use trusted experts in irrevocable trust work for the most beneficial plans and irrevocable trust management.

I recommend: Both Dykema and Butzel Long are nationwide law firms with attorneys specializing in trusts, estate planning and taxation law.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The primary disadvantage of irrevocable trusts is their complexity, both from a planning and tax perspective, and their cost to establish and manage. The irrevocable status of these types of trusts make them undesirable when significant changes/reductions in wealth or family circumstances happen and the trust cannot be adapted to by law.
• •  Get quality irrevocable trust information before attempting to use online forms to put the trust together yourself.