An irrevocable trust is one whose existence will continue as long as the terms and conditions mentioned in that trust isn’t fulfilled. A trust in simple word is a contractual arrangement. As per this written arrangement a person or an organization is assigned the duty to take care of the tangible, intangible assets of a person. The person who has created a trust is called the settlor. The person or the organization who takes care of the property in benefit of the other person is known as the trustee.

The concept of trust law has developed from England when the feudal system was prevalent. The concept has been incorporated not only in USA bur also in other nations of the world. In USA the presence of this law reflects the legacy of the British colonial era.

There are several types of trusts prevalent like-
1) Constructive trust,
2) Express trust,
3) Fixed trust,
4) Implied trust,
5) Inter vivos trust, etc.

One of the several types of trust mentioned above is the irrevocable trust. These types of trusts are not without its advantages and disadvantages. Some advantages of this type of trust are as follows:-
1) It gives protection to your assets. The settlor can’t be sued for anything because he owns nothing.
2) After the death of the person setting up the trust there is no estate tax whatsoever. This is because the person doesn’t own anything technically.
3) The property of the person doesn’t go through the probate process.
4) Since, the property comes from an irrevocable trust there is no taxes on a gifted property.
5) There is peace of mind in case of this trust. This is because there is no way by which a property mentioned under this trust can be taken away by lawsuit.

There are some disadvantages inherent in an irrevocable trust:
1) The settlor gives a certain portion of the asset to the trustees to mange the trust property for beneficiaries.
2) It is taxed briskly at a rate around 35 percent.
3) A settlor who is a beneficiary doesn’t receive any benefit from tax payments. Apart from this there are several other aspects which have made irrevocable trust also famous as income trust.
4) Being a separate entity, the trust formed as irrevocable trust is supposed to pay taxes separately.

There are some other disadvantages too. However, the decision on the type of trust that needs to be formed in your case needs lawyer evaluation. You should contact a lawyer who has considerable experience in trust law and in drafting this type of document.

Ashley Smith, a contributor to legal and financial journals, offers helpful tips on the right approach to legal issues, like Trust laws and related issues. In case you require an advice regarding irrevocable trust, he would suggest you to visit a very informative website www.lodmell.com.

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