Advantages of an irrevocable living trust include estate tax reduction and protection of assets, explains About.com. Assets placed in an irrevocable trust cannot be touched by creditors, and estate taxes are reduced because once an asset is placed into an irrevocable trust, that asset is owned by the trust.
If an individual places assets into an irrevocable trust, when he passes away, an estate tax cannot be imposed on those assets, as they were no longer owned by the deceased, About.com explains.
Many people commonly establish irrevocable trusts for charitable estate planning purposes, such as through a charitable remainder trust or a charitable lead trust. If certain assets are placed into a charitable trust while the trust maker is still alive, he receives a charitable income tax deduction in the year the transfer is made. If the transfer of assets into a charitable trust happens after the trust maker's death, the estate receives the charitable estate tax deduction.
There are a number of different irrevocable trusts that address the specific situations and needs of the trust maker, CNN Money advises. Bypass trusts pass assets to a spouse without imposing taxes, and generation-skipping trusts save assets for future descendants. Life insurance trusts pass proceeds from insurance polices to the beneficiaries without tax consequences.