What is an irrevocable trust?

In comparison to a revocable trust, an irrevocable trust cannot be changed or terminated without the permission of the trust's beneficiaries. So assets in such a trust cannot be removed without the beneficiaries' consent since the grantor has effectively transferred their ownership of assets into the trust. By establishing this trust the grantor has legally removed all of their rights of ownership to the assets and the trust. An irrevocable trust can be "broken" (revoked) only by a judicial proceeding.

This trust is often suggested for clients that are vulnerable to lawsuits, such as doctors or attorneys because an irrevocable trust will not be a party to any lawsuit. It is also helpful because it removes the grantor's tax liability on the income the assets generate. The assets can include — but are not limited to, a business — investment assets, cash, and life insurance policies.