An irrevocable trust is one that, once created and funded, cannot be changed, amended, revoked or cancelled by the creator. The grantor transfers legal title of the property to the trustee, who is responsible for administering that property for the benefit of the trust's beneficiaries.
- Income Taxes - often created to limit or shift income tax burdens created by income or capital gain.
- Estate Taxes - allows appreciated value property to transfer to beneficiaries without, or at lower, estate tax.
- Control - permits grantor to control use and distribution of income and principal even after death.
Tax laws place significant restrictions on what a trustee can do if he or she is also a beneficiary or potential beneficiary of an irrevocable trust. As a result, the use of a bank as trustee permits a grantor to continue to receive certain benefits of the trust property while still obtaining the tax advantages for which the trust was created.