Irrevocable Living Trust

What Does Irrevocable Living Trust Mean?

An irrevocable living trust is a trust established during the grantor’s lifetime that cannot be revoked. This means that, once the trust is finalized, it cannot be altered or canceled.

Creators of irrevocable living trusts often include life insurance policies within them. These are usually permanent life insurance policies, since the coverage needs to remain in force for the grantor’s entire lifetime to fund the trust at death.

Insuranceopedia Explains Irrevocable Living Trust

Many people establish irrevocable living trusts to reduce estate tax liabilities upon a person’s death and the subsequent transfer of their estate. These trusts enable them to achieve financial savings when assets are passed to beneficiaries. Including life insurance policies in irrevocable living trusts, therefore, helps preserve wealth and allows for a secure and efficient transfer of assets. Because the policy needs to stay active for the grantor’s lifetime, financial strength ratings are a major factor when comparing life insurance companies for this kind of trust.