While there is no such thing as an irrevocable will, there is an irrevocable trust, which is mainly used for estate assets and cannot be revoked or changed, notes Investopedia. There are also irrevocable living trusts, which can't be revoked and are used to lower taxes and transfer financial assets.Continue Reading
The main difference between an irrevocable trust and a revocable trust is that a revocable trust can be changed or terminated until the trust maker dies, at which time the trust becomes an irrevocable trust, says Nolo. The term "living" is used to describe a trust that is legally binding while the trust maker is alive. An individual can also draw up a testamentary trust while alive, but it doesn't go into legal effect until the trust maker dies.
Different types of irrevocable trusts can be used to avoid and reduce taxes, notes Nolo. Examples of different types of irrevocable trusts include charitable trusts, bypass trusts, QDOT trusts and QTIP trusts. A bypass trust is used to lower estate tax when the second spouse dies, and a QTIP trust is used to delay payment on estate taxes until the second spouse dies. QDOT trusts are common when one spouse is considered a non-citizen. Charitable trusts lower income and estate taxes through gifts to charity.Learn more about Financial Planning