The entire point of an irrevocable trust is to set the fund up so that it cannot be changed. This removes the money from your estate, with one of the benefits being that you can reduce the tax burden on that estate. By making it irrevocable, it shows that the money is really out of your control.
That said, there are some exceptions to this rule, ways that the trust can be changed and altered after the fact. It’s important to know how this works when drafting a trust or considering your options later on.
For instance, say you decided to create a charitable trust. You set it up to comply with local tax laws and federal tax laws. Everything looks perfect.
However, you know that tax laws can and do change. You can’t predict these changes, but you want to keep the focus on your main goal: giving as much of that money as possible to the charity, as smoothly and easily as you can. What you should know, then, is that you can add provisions to the trust agreement saying that it can be modified to reflect future changes to applicable laws.
To do it, you have to have all of the beneficiaries and the trustee sign a document allowing the change. This ensures that it is a proper change for the good of the trust and the charity, while still giving them the flexibility that they may need in the future.
This is just one example, but it shows you why it’s so important to really look into all of your legal options with any trust.