An irrevocable trust is a trust that cannot be changed or altered after it is set up. With an irrevocable trust, a person gives up ownership of all his assets and transfers the ownership to a trust that is managed by a trustee. The person still has use of the assets, but no longer owns or controls them. In most cases, a person transfers ownership of the house, cars, bank accounts, brokerage accounts and other assets to the trust. There are a few benefits to an irrevocable trust.
The assets are protected from lawsuits. The grantor (the person setting up the trust) does not own any property or have any assets so there is no reason for anyone to sue him.
No Estate Taxes
Since the deceased did not own any assets, there is nothing to be taxed upon his death.
After a person dies, her estate goes into probate as the court decides who the heirs are and who gets what assets. This process can take a long time even if the deceased left a will. An irrevocable trust avoids all this.
Easy Charity Donations
With an irrevocable trust, it is easier to give property to charity. There is also no tax on this property because it comes from an irrevocable trust.
Peace of Mind
With an irrevocable trust, you know your assets cannot be seized because of a lawsuit, and your know your family is taken care of as the beneficiaries. Also, should the grantor become incapacitated, any financial issues have already been decided by him through the trust.