An irrevocable trust is a one-way decision — and that one-way nature is exactly what makes it work. By giving up the ability to take property back, you generally remove it from your estate, and — when properly structured and funded well before any specific claim — can reduce exposure to future creditors, subject to fraudulent-transfer rules and other applicable law. It also uses gift and GST exemption at today's levels.
Key Points
Every benefit of an irrevocable trust — estate exclusion, creditor protection, GST allocation — flows from the fact that you have actually given up control. Drafting tries to preserve as much practical flexibility as possible (trust protectors, decanting rights, distribution committees) without compromising the tax and asset-protection result.
Need to keep life insurance proceeds out of the estate? ILIT. Need to use exemption now while keeping indirect spousal access? SLAT. Need to freeze the value of an appreciating asset? Sale to IDGT or short-term GRAT. Need multi-generational tax-efficient growth? Dynasty trust. Need creditor protection on assets you may still need? DAPT (Ohio Legacy Trust or out-of-state).
Next Step
Fixed-fee estate planning for clients in New York, New Jersey, and Ohio.
Drew Jacobs is licensed in New York, New Jersey, and Ohio. Nothing on this page constitutes legal advice or an offer to represent you in a jurisdiction in which we are not licensed.