A trust can be an excellent addition to your estate plan. You have two basic choices: revocable or irrevocable. The names pretty much explain what they are. You can change revocable trusts, but you cannot change irrevocable trusts. While revocable trusts are often the best choice, there are some situations, according to US News and World Report, where irrevocable trusts are the best choice.
The main reason why you may choose an irrevocable trust is that it offers tax advantages over a revocable trust. It is important to note that this is usually only the case if you are financially well off. Otherwise, the tax breaks are not that impactful and are not a good reason to choose this type of trust.
It is best to use this type of trust for a situation you know will not change. For example, if you have a child who will need lifelong care or if you have assets that need to be protected due to business ownership, these are situations that will not change and could be best for an irrevocable trust. These are the types of situations where this type of trust comes in handy.
In any case, you should only choose an irrevocable trust if you are 100 percent sure it is what you want. Remember you cannot change it except for some very limited situations. Also, note that it is more expensive to administer and execute this type of trust, so make sure it is exactly what you need for your situation. This information is for education and is not legal advice.