What Is an Irrevocable Trust?
An irrevocable trust is a trust arrangement that, once created and funded, cannot be changed, amended, or revoked by the person who created it (the grantor) without the consent of the beneficiaries or a court order. Unlike a revocable living trust, the grantor gives up control of the assets transferred into the trust.
Because the grantor no longer owns or controls the assets, irrevocable trusts provide benefits that revocable trusts cannot: creditor protection, estate tax reduction, and Medicaid eligibility planning.
Florida Irrevocable Trust Law
Irrevocable trusts in Florida are governed by the Florida Trust Code, Chapter 736, Florida Statutes. Key provisions:
- Modification — Under Section 736.04113, a court can modify an irrevocable trust if the purposes of the trust have been fulfilled, circumstances have changed, or modification is consistent with the grantor's intent.
- Decanting — Under Section 736.04117, a trustee with discretionary distribution authority can "decant" (pour) assets from one irrevocable trust into a new trust with different terms, providing a mechanism to update outdated provisions.
- Spendthrift protection — An irrevocable trust with a spendthrift clause protects the beneficiary's interest from the beneficiary's own creditors (Section 736.0502).
Common Types of Irrevocable Trusts
- Irrevocable life insurance trust (ILIT) — Holds life insurance policies outside the estate to avoid estate tax on the proceeds.
- Qualified personal residence trust (QPRT) — Transfers the home to the trust at a reduced gift tax value while allowing the grantor to continue living there for a specified term.
- Charitable remainder trust (CRT) — Pays income to the grantor during their lifetime, with the remainder going to charity.
- Medicaid asset protection trust — Removes assets from the grantor's estate to qualify for Medicaid long-term care benefits (requires a 5-year lookback period).
- Dynasty trust — Preserves wealth for multiple generations while avoiding generation-skipping transfer tax.
Related Terms
- Living Trust (Revocable) — Can be changed; does not provide creditor protection
- Trustee — Manages the irrevocable trust
- Beneficiary — Receives distributions from the trust
- Fiduciary Duty — Trustee's obligation to the beneficiaries
Barnes Walker Irrevocable Trust Services
Barnes Walker's estate planning attorneys design irrevocable trust structures for asset protection, tax planning, and Medicaid eligibility. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 736 (Florida Trust Code)
The Florida Trust Code governs the creation, modification, and administration of trusts, including trustee duties, beneficiary rights, and trust termination.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC