What is an irrevocable trust?

An irrevocable trust is a type of trust that, once established, cannot be changed or disbanded without the permission of the beneficiary. Irrevocable trusts are commonly used in estate planning and carry certain tax benefits, depending on the state in which they are created. In Washington state, irrevocable trusts are often used to avoid estate taxes when a person passes away. An irrevocable trust is created when a settlor, the person who sets up the trust, transfers their assets to the trust. Once this happens, the settlor no longer owns the assets, and the assets are held for the benefit of the beneficiary, the person designated to receive the assets after the settlor passes away. The assets will remain in the trust until the terms of the trust are fulfilled and the assets can be distributed to the beneficiary. The major benefit of an irrevocable trust is that, since the settlor no longer owns the assets in the trust, they are not subject to estate taxes or other taxes that might otherwise apply to inherited assets. This can be beneficial for high net worth individuals in Washington state who wish to reduce their tax burden after death. It is important to note that, once created, an irrevocable trust cannot be changed in any way without the permission of the beneficiary. As such, it is important to carefully consider the terms of the trust before establishing it, as once it is established it cannot be reversed.

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What is an irrevocable trust?

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