Irrevocable Living Trusts

You cannot revoke an irrevocable living trust.

By , Attorney
Updated 9/01/2023

Irrevocable trusts cannot be terminated after they are finalized. This sets them apart from revocable trusts which can be terminated, at least until they become irrevocable at the death of the trust maker (the grantor). To learn more about revocable trusts, go here. When talking about trusts, the term "living" means that the trust goes into effect during the grantor's life. So, an irrevocable living trust is a trust that 1) goes into effect during the grantor's life and 2) cannot be revoked. To confuse things further, a "testamentary" is a trust that is made during a grantor's life, but does not go into effect until the grantor's death.

Irrevocable Trust Terminology

These terms can get confusing; here is a breakdown:



Revocable trust

A trust that can be revoked.

Revocable living trust

A trust that can be revoked and that takes effect during the life of the grantor. Becomes irrevocable at the death of the grantor. Usually made to avoid probate.

Irrevocable trust

A trust that cannot be revoked.

Irrevocable living trust

A trust that cannot be revoked and that takes effect during the life of the grantor. Usually made to transfer wealth, protect assets, or reduce taxes.

Testamentary trust

A trust created during the life of the grantor, but that takes effect at the grantor's death. Usually made as part of a will – for example, a child's trust made to name a trustee for property left to a minor.

Types of Irrevocable Trusts

There are dozens and dozens of types of irrevocable trusts made for different purposes. The two most common reasons to make an irrevocable trust are 1) to reduce taxes, and 2) to protect property.

Irrevocable Trusts to Reduce Taxes

Grantors most often use irrevocable trusts to avoid or reduce taxes. For example:

  • Bypass Trusts – A trust used by spouses to reduce estate taxes when the second spouse dies. When the first spouse dies, the bulk of his or her property goes into the trust. The surviving spouse can use trust property (and income from trust property), but he or she never owns it. So when the surviving spouse dies, that property is not included in his or her estate.
  • QTIP Trusts – A trust used by couples to postpone the payment of estate taxes until the second spouse dies.
  • QDOT Trusts – Like QTIP trusts, but used when one spouse is a noncitizen.
  • Charitable Trusts – A trust designed to reduce income and estate taxes through gifts to charity. Three types of charitable trusts are:
    • charitable remainder trusts – You put property in a trust, name a charity to be the final beneficiary, and then name someone else to receive income from the trust for a set amount of time.
    • charitable lead trusts -- You put property in a trust, name a charity to receive income from the trust for a set amount of time, and then name someone else as a final beneficiary.
    • pooled income trust – You pool your money with other trust makers and receive trust income for a set time. For pooled charitable trusts, a charity is the trustee and the final beneficiary.

Learn more about Charitable Gifts and Trusts.

  • Generation-Skipping Trusts – These trusts are designed to reduce estate taxes for wealthy families. The final beneficiary is a grandchild or group of grandchildren. The child is usually an income beneficiary, but never owns the property, so that the trust property is not subject to estate tax when the child dies. This type of trust is subject to a generation skipping transfer tax.
  • Life Insurance Trusts – These trusts reduce estate taxes by removing the proceeds of life insurance from a taxable estate. Instead, the trust owns the insurance policy. The beneficiary of the policy can be anyone, but the trustee must be someone other than the previous owner of the policy. The grantor cannot have any control over the policy once the trust is made, and the trust must exist for at least three years before the grantor's death.
  • Grantor-Retained Interest Trusts (GRATs, GRUTs, GRITs, and QPRTs) – These trusts also reduce estate taxes by removing property from a taxable estate. The trust maker puts property into the irrevocable trust and names final beneficiaries, but retains some interest in the trust for a set amount of time. That interest might be a fixed annuity from the trust (GRAT), a variable annuity (GRUT), trust income (GRIT), or the right to live in the trust property, a home (QPRT). When that set time period is over, the final beneficiaries own the property outright, and the IRS will value the gift at the time of the creation of the trust. The grantor must outlive the terms of the trust, or no savings will be created.

Learn more about estate taxes on the Estate and Inheritance Taxes section of

Irrevocable Trusts for Protecting Property

Irrevocable trusts can also be used to meet other goals, such as to protect assets from being squandered or to protect the assets of a person with a disability.

Spendthrift Trusts -- Spendthrift trusts allow you to protect (and control) gifts that you give to those who may not be able to manage the money themselves. You put property into a trust, and the trustee (which can be you) doles out money to the beneficiary according to the terms of the trust. The beneficiary cannot access trust property on his or her own, so it is protected from the beneficiary's creditors – at least until payments are made directly to the beneficiary.

Special needs trusts -- A special needs trusts provides financial support for a person with special needs, without affecting his or her qualifications for government benefits. Property is put into a trust for the benefit of a person with special needs, often by a parent or other relative. The terms of the trust allow the trustee to use trust funds to buy certain things for the beneficiary, but because the beneficiary never owns trust property it is not considered to be an asset when he or she applies for government benefits.

Learn more about Special Needs Trusts.

Making an Irrevocable Trust

Most irrevocable trusts require skilled drafting by an experienced attorney. To learn about hiring a lawyer, go to the Working With a Lawyer section of

Or to learn more about trusts and estate planning, go to the Wills, Trusts & Estates section of

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