For affluent investors and families seeking to protect their wealth, minimize taxes, and ensure a smooth transfer of assets, trusts are a fundamental component of estate planning. Among the different types of trusts, an irrevocable trust offers unique advantages and protections that other estate planning vehicles do not. What Is an Irrevocable Trust? An irrevocable trust is a legal entity that holds assets for the benefit of designated beneficiaries while being managed by a trustee. Unlike a revocable trust, an irrevocable trust cannot be modified, amended, or revoked once it is created, except under very specific legal circumstances. This finality is what makes it so powerful–it removes assets from your taxable estate, protects them from creditors, and ensures long-term financial planning strategies remain intact. Why Would Someone Use an Irrevocable Trust? Wealthy individuals often use irrevocable trusts for one or more of the following reasons: Estate Tax Reduction – Assets placed in an irrevocable trust are removed from the grantor’s taxable estate, helping to reduce estate tax liability. Given the federal estate tax exemption in 2024 is $13.61 million per individual ($27.22 million per married