What is "Irrevocable Trust" meaning?

An irrevocable trust is a trust arrangement where the grantor transfers assets into the trust and permanently relinquishes control over them. Unlike a revocable trust, the terms of an irrevocable trust cannot be changed, and the assets are no longer considered part of the grantor's estate. This type of trust is often used for estate planning and tax purposes.

Example

"To minimize estate taxes, she established an irrevocable trust for her family’s future financial security."

How is "Irrevocable Trust" used in business?

In business, irrevocable trusts are often used as part of strategic estate planning, to protect assets from creditors, or to reduce tax liabilities. For business owners, placing business assets into an irrevocable trust may safeguard them from personal financial risk or estate taxes.

Pro Tip

Once assets are transferred into an irrevocable trust, you cannot reclaim them, so it's essential to carefully consider your long-term goals before creating one.

Related Terms

Estate Planning, Trust Fund, Asset Protection, Tax Strategy