23 Dec What Are the Advantages of an Irrevocable Trust?
Most people think that trusts are only for the wealthy, or perhaps for families with complicated relationships. And while trusts are very useful in these situations, in reality, they can benefit just about anybody. Every year, our clients use trusts to keep their estates out of probate and to ensure that their assets will be handled responsibly.
If asset protection is your goal, an irrevocable trust can make a big difference. They’re designed to protect what you’ve worked so hard to earn. And they help you make sure your assets go where you want them to—whether it’s to your family, a charity, or both.
What Is an Irrevocable Trust?
An irrevocable trust is a legal agreement that moves ownership out of your name and over to the trust instead. Once your assets are placed in the trust, you can’t take them back or make any changes.
Although this may sound restrictive, it’s exactly why it works.
With an irrevocable trust, you give up the flexibility of a living trust in exchange for security—like shielding your assets from lawsuits, creditors, or future legal problems. Irrevocable trusts are also the foundation for many charitable trusts. They allow you to support causes you care about, with asset protection that helps you maximize your contribution.
Real Asset Protection When It Matters Most
The biggest advantage of an irrevocable trust is that it offers protection against creditors and lawsuits. Because the trust legally owns the assets, they’re harder for outside parties to reach.
This is important for people who own businesses or rental properties, or those who have a higher risk of getting sued. If your business goes bankrupt or one of your tenants sues, the savings you set aside in trust for your children will stay safe.
With a living trust, you stay in complete control and can make changes or move assets around any time you choose. But that also means you retain ownership of the assets in the trust, and a lawsuit could put them in jeopardy. Sometimes, giving up that flexibility is the best way to protect your estate.
Leaving an Inheritance for a Minor Child
Many parents worry about leaving an inheritance for a minor child. They simply don’t want to put their lifetime of work at risk. The thought of handing everything you own to an 18-year-old can feel risky. And, in many cases, it is.
An irrevocable trust can help parents plan for beneficiaries who are underage or who aren’t very responsible with finances. A trust allows you to set rules like:
- When money will be distributed
- How it can be used
- Who will manage it until your child is ready
Can an Irrevocable Trust Be Challenged?
Yes, but winning a challenge isn’t easy.
Because irrevocable trusts are designed to be final, courts usually require strong evidence to challenge them. If there is any proof of fraud, lack of mental capacity, or undue influence at the time the trust was created, it can be overturned. However, a properly constructed trust is much harder to dispute, which is why careful planning matters.
Planning With Confidence
Irrevocable trusts are about protection, clarity, and peace of mind. They make the most sense for families who need strong legal protection, are planning for children, or are concerned about future disputes.
At Phelps LaClair, estate planning is all we do, and we’ve been doing it for over 30 years. We’re here to advise you on the best ways to protect your assets and preserve your wealth. If you’re wondering whether an irrevocable trust is right for your situation, contact us today. We’ll walk you through all the options at your free first consultation.
Photo by Romain Dancre on Unsplash used with permission under the creative commons license for commercial use 12/18/25.