What is an Irrevocable Trust? | IRS Definition of a Trust

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An irrevocable trust is a special type of account that holds assets that are given by a grantor. The trust account will hold these assets either indefinitely or under specific terms set out in the trust, generally to the benefit of a specific beneficiary such as a relative or a charity. The trust account is an entirely separate entity to the grantor and the beneficiary, and consequently requires its own EIN.

That is not to say the beneficiary has complete control over the trust; far from it. The grantor still states the terms of the original trust, and the irrevocable trust has to abide by these terms. An irrevocable trust can be set to expire after a certain date, or may dissolve if the beneficiary fails to meet the standards of the trust. A common type of irrevocable trust could hold funds for a grandchild as long as they maintain their college performance. Another type of irrevocable trust could give money to charity over a set period of time and then dissolve.

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