What Is an Irrevocable Living Trust?

An irrevocable living trust is a type of trust that cannot be modified, amended, or revoked once it’s created—except under limited circumstances and often only with the consent of the beneficiaries and/or a court. Once you transfer assets into an irrevocable trust, you legally remove your ownership and control over them. This might seem restrictive, but it comes with powerful legal and financial benefits.

This type of trust is commonly used for asset protection, tax reduction, and Medicaid planning.

Purpose of an Irrevocable Living Trust

The primary purpose of an irrevocable trust is to:

• Protect assets from lawsuits, creditors, and divorce
• Reduce estate and gift taxes
• Preserve eligibility for Medicaid or other needs-based government benefits
• Ensure long-term care planning
• Provide structured inheritance for beneficiaries
• Support charitable giving with tax advantages

By permanently transferring ownership of assets to the trust, you protect them from legal and financial threats while ensuring they are managed and distributed according to your wishes.

Pros of an Irrevocable Living Trust

There are several compelling reasons to establish an irrevocable trust—particularly for individuals and families looking to secure their legacy and limit liability.

✅ Asset Protection
Once placed in an irrevocable trust, assets are no longer considered part of your personal estate. That means they can’t be seized in lawsuits, divorce settlements, or by creditors.

✅ Estate Tax Reduction
Because the assets in the trust are no longer yours, they are removed from your taxable estate—helping reduce estate taxes for high-net-worth individuals or families.

✅ Medicaid Planning
Irrevocable trusts can help you qualify for Medicaid without spending down all your assets. With proper planning, you can preserve your home and savings for your loved ones while still accessing long-term care benefits.

✅ Control Over Asset Distribution
You can set terms for how, when, and under what conditions your beneficiaries receive their inheritance—minimizing the risk of mismanagement or financial exploitation.

✅ Charitable Giving Opportunities
Certain types of irrevocable trusts—like charitable remainder trusts (CRTs)—offer ways to donate to a cause you care about while receiving income and tax benefits.

Cons of an Irrevocable Living Trust

An irrevocable trust isn’t the right solution for everyone. There are some important drawbacks to consider:

❌ Loss of Control
Once you place assets into the trust, you can’t change your mind. You lose personal ownership and the ability to manage those assets directly.

❌ Complexity
Irrevocable trusts are complex legal instruments and require careful planning to ensure they’re structured properly. A DIY approach is not recommended.

❌ Limited Flexibility
Because they are difficult to amend or terminate, irrevocable trusts must be created with long-term intentions in mind. Any changes typically require court approval or agreement from all beneficiaries.

❌ Funding Required
Assets must be transferred to the trust to be protected. Failing to properly fund the trust may render it ineffective.

Why People in Pierce County Might Need an Irrevocable Living Trust

For residents of Pierce County—including Tacoma, Gig Harbor, Puyallup, and Lakewood—an irrevocable trust may offer unique advantages depending on their personal, financial, or health circumstances. Here’s why:

✔ Protect Your Home and Savings
If you’re concerned about nursing home costs or future medical expenses, an irrevocable trust can protect your home and life savings while still making you eligible for Medicaid.

✔ Business and Real Estate Owners
Business owners and landlords in Pierce County often use irrevocable trusts to shield valuable property and assets from liability, lawsuits, and probate disputes.

✔ Multi-Generational Planning
Irrevocable trusts allow you to leave a lasting legacy for your children and grandchildren while ensuring the assets are used responsibly over time.

✔ Risk of Legal Claims
Professionals in high-liability fields—such as healthcare, law, or construction—often use irrevocable trusts as a safeguard against personal liability.

✔ Support for Loved Ones with Special Needs

If you have a child or dependent who relies on government aid, an irrevocable special needs trust can preserve their access to public benefits while providing supplemental financial support.

How Whalley Law Can Help

Creating an irrevocable trust is a serious decision that demands personalized legal guidance. At Whalley Law, our experienced estate planning attorneys in Pierce County will help you:

• Evaluate whether an irrevocable trust is right for your situation
• Choose the right type of irrevocable trust (asset protection, Medicaid, charitable, special needs, etc.)
• Draft a legally sound and enforceable trust
• Properly transfer and fund your trust assets
• Avoid mistakes that could trigger taxes or disqualify you from Medicaid

We take the time to understand your goals and craft a plan that protects your future—and your family’s future.

Take the Next Step to Protect Your Legacy

If you have significant assets, concerns about long-term care, or loved ones who need ongoing support, an irrevocable trust may be the ideal solution. Don’t wait until it’s too late to start planning.