An irrevocable trust is just like it sounds — irrevocable. In other words, once you create the trust and transfer assets to it, you can’t dismantle the trust and take back the assets. In this sense, the trust cannot be changed, modified or taken apart by anyone, including the grantor who initially created it.
When creating an irrevocable trust, the grantor or estate planner will benefit from having flexibility in terms of the trust’s organizational structure. However, once the trust has been signed and finalized, it’s set in stone. In some cases, trust creators use irrevocable trusts as a container for survivorship life insurance for estate tax-planning purposes. In other cases, a grantor will sign over ownership of real estate property, bank account assets and investment assets to the irrevocable trust. This could potentially protect the grantor’s assets from creditors.
When the grantor dies, the trust endures as the owner of the assets, which it holds and manages for the benefit of the trust beneficiaries according to the terms of the trust. Of course, the trust doesn’t manage the assets contained inside it without the aid of the trustee who is the named individual in charge of managing and distributing the funds in the trust in strict accordance with the instructions laid out within the document.
If you’re considering creating an irrevocable trust in your estate plan, makes sure you discuss the idea with a qualified California estate planning attorney to ensure that it is right for you and can meet the current and future needs of all your beneficiaries.