Irrevocable TrustsIrrevocable Trusts are legal entities that hold assets for its beneficiaries according to the terms of the trust agreement as established by the individual grantor who creates the trust and transfers assets to the trust. Unlike revocable trusts, the assets held in these trusts cannot be taken out of the trust by the grantor and the terms of the trust cannot be changed. The benefits of irrevocable trusts are that they offer tax advantages and asset protection. Some common Irrevocable Trusts are: • Special Needs Trust – In this trust, the assets are available to provide for the needs of a disabled person in such a way to supplement their government benefits but not to an extent that would cause such benefits to be lost. • Charitable Remainder Trust – In this trust, the beneficiaries receive the income from the trust assets and a charity receives the principal after a specified period of time. Benefits: The grantor avoids capital gains tax on the donated assets, receives an income tax deduction for the fair market value of the remainder interest that the trust earned, additionally, as the assets are gifted out of the grantor’s estate, it will reduce estate taxes (if any). • Generation-Skipping Trust (also called a Dynasty Trust) - This enables a grantor to transfer up to the then current generation skipping tax exemption limit to family members at least two generations younger (usually grandchildren). These trust also provide an asset shelter for those beneficiaries. • Irrevocable Life Insurance Trust - This trust removes the value of life insurance from the grantor’s estate and thereby reduces estate taxes. • Qualified Personal Residence Trust - This trust can shield a home from estate taxes.