An irrevocable trust is considered to be a type of trust that cannot be modified or terminated without the permission of the trust beneficiary or beneficiaries. The grantor of an irrevocable trust removes all of his or her rights of ownership to the assets and the trust. Once an irrevocable trust is created, the written agreement of the trust is set in stone and cannot be changed for any reason in the future. Any property that you place into an irrevocable trust is now considered to be part of the trust, therefore the said property does not belong to you.
An irrevocable trust may offer some tax advantages especially with your capital gains taxes. If an irrevocable trust is structured correctly, and assets are transferred into the trust, it's possible that those assets may be received as a step-up in basis to your beneficiaries upon your death. An irrevocable trust may provide a tax advantage to your primary residence by retaining your capital gains tax exclusion which you would not be able to do if it was received as a gift by the beneficiary of your trust. Some other benefits that an irrevocable trust could bring to your estate is, your Trustee can manage your investments more efficiently, and you may be able to shift income to a lower tax bracket for your beneficiaries, and protect your assets for your beneficiaries if they are on Medicaid or SSI. The irrevocable trust will keep your property out of your estate for probate purposes. Contact an estate planner to discuss how these benefits could help you with your irrevocable trust needs.