An irrevocable trust is a legal tool used to transfer the ownership of assets. This type of trust is not able to be modified or amended without permission from the grantor’s beneficiaries or by court order, giving it a degree of permanence compared to revocable trusts. When the grantor funds an irrevocable trust, they relinquish all of their ownership rights to the assets and the trust itself.

Two types of irrevocable trust include living trusts and testamentary trusts. An irrevocable living trust is a trust that is set up while the grantor is still alive, and they can determine who they want to be trustees and how assets are to be managed and distributed. A testamentary trust, on the other hand, is when a trust is set up upon the death of the grantor, including stipulations about how assets are to be managed and distributed.

There are several benefits associated with creating an irrevocable trust. Firstly, the assets that are transferred into the trust can be exempted from estate taxes, depending on the type of trust that is set up. Another advantage of an irrevocable trust is the privacy it offers; Documentation associated with the trust is not accessible to the public unlike probate proceedings. Additionally, because the trust is irrevocable, it protects the assets from creditors, or people to whom the grantor may owe money.

Finally, under the SECURE Act, some beneficiaries may have to take a full distribution by the end of the tenth calendar year following the year of the grantor's death. This new timeline means that grantors may have to structure their trusts differently in order to plan for succession of beneficiation.

Though there are several benefits of using irrevocable trusts, one must consider that the grantor has given up all management rights to the assets in the trust and cannot modify or terminate the trust without the permission of the beneficiaries or by court order. Therefore, when considering the meaningful step of setting up an irrevocable trust, one must explore all their options and consult with legal and financial professionals before making a decision.