What Is an Irrevocable Living Trust?

The term “Trust Fund” often evokes images of the Kennedys, Rockefellers, and Du Ponts sheltering their vast fortunes from the grasp of the government. This popular trust is referred to at the Irrevocable Living Trust.

If a Revocable Living Trust is a wallet, think of the irrevocable trust as Fort Knox; it’s secure, but once the property is inside you can’t just reach in and grab it when you want it. When assets are placed in an irrevocable trust the creator of the trust loses ownership rights in the property and the right to modify or revoke the trust. The primary purpose of the irrevocable living trust was to minimize or eliminate the federal estate tax. Others reasons include insulating wealth from the high expense of medical care and protecting property from creditors.

Irrevocable living trusts were popular throughout the twentieth century, when relatively modest estates were subject to as much as a 77% estate tax. As recently as 2001, estates valued at $675,000 were subject to the Federal Estate Tax. However, as of 2016, estates with a value below $5,450,000 ($10,900,000 for married couples) are not subject to the Federal Estate Tax. Therefore, some primary benefits of the irrevocable living trust are no longer applicable to more than 99% of the population.

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Robert Ingalls

I am the founding member of Ingalls Law, PLLC. My practice focuses primarily on Civil Litigation, Personal Injury, and Workers' Compensation. I graduated from East Carolina University with a Bachelor of Science, and received my law degree three years later. I have been admitted to the North Carolina State Bar and the United States District Court for the Western District of North Carolina. I represent clients in the areas of Civil Litigation, Workers' Compensation, Employment Discrimination, and Personal Injury. I have also represented employees and employers in hundreds of unemployment benefits hearings throughout North Carolina. In addition to my law practice, I am an active member of the North Carolina Bar Association, Mecklenburg County Bar Association, American Bar Association, Delta Theta Phi Law Fraternity, and The North Carolina Advocates for Justice.