An irrevocable trust is a legal arrangement in which the grantor transfers assets to a trust and gives up all control and ownership of the assets.

Once established, the terms of an irrevocable trust cannot be changed, and the assets cannot be returned to the grantor. An irrevocable trust is often used as an estate planning tool to help protect assets from taxes and creditors, and to provide for the grantor’s beneficiaries.

Because the assets are no longer considered to be owned by the grantor, they may not be subject to estate taxes upon the grantor’s death. Additionally, assets held in an irrevocable trust may be protected from creditors or legal judgments.

However, setting up an irrevocable trust can be a complex process, and the grantor should carefully consider the potential benefits and drawbacks before making this type of arrangement. While irrevocable trusts offer greater protection and control over assets, they also require a higher level of financial planning and may come with additional administrative costs.