Benefits and Drawbacks of an Irrevocable Trust

 Posted on September 25, 2025 in Estate Planning and Probate

When you decide to create a trust, you will have two main options: revocable or irrevocable. Revocable trusts are more common. Having the ability to go back and make changes very easily appeals to a lot of people. The term "irrevocable" can scare people off easily. Because most people transfer all or almost all of their property into their trusts, a lot of people are afraid to create a trust they cannot revoke. However, there are a few distinct benefits of using an irrevocable trust. 

One of the most significant benefits of irrevocable trusts is the unparalleled asset protection features. Of course, an irrevocable trust is not without risks. If you are considering using an irrevocable trust, a Comal County, TX estate planning lawyer can help you decide whether this is the right move. Geoff Mayfield, Attorney at Law has years of legal experience representing clients in complicated estate planning matters, and he can provide you with personalized counsel to help safeguard your assets.

What Can a Trust Do That a Will Cannot?

The purpose of a last will and testament is to distribute your property according to your wishes after your passing. This can give you peace of mind during the estate planning process, clearing up uncertainties about what will become of your assets.

A trust serves a similar purpose as a will, and the two are often used together. Unlike a will, trusts transfer ownership of your property during your lifetime to the trust. The person responsible for handling the assets in the trust, the trustee, will distribute the assets according to your instructions to the beneficiaries, usually after your passing. Unlike a will, a trust allows you to decide how and when the assets will be distributed. For instance, some people include a "spendthrift clause" that restricts a beneficiary’s access to the funds until they reach a certain age. 

Trusts can be set up as "revocable," which allows you to go back and change the terms of the document later. On the other hand, "irrevocable" trusts cannot be changed later.

Benefits of Setting Up an Irrevocable Trust in Texas

The benefits of using an irrevocable trust include: 

• Public benefits: A lot of public benefits, like Medicaid and Supplemental Security Income, are only offered to those who do not have enough assets to meet their own needs. If your irrevocable trust owns your assets, then you do not. Therefore, no property contained in the trust can be counted against you for purposes of qualifying for benefits. 

• Asset protection: If you cannot willingly reach into your trust and take money out to pay something like a lawsuit settlement, then neither can the person who sued you. If you or any of your beneficiaries are in a profession that carries a high risk of getting sued, this benefit alone may be worth it. 

• Tax benefits: If you have a high-value estate, using an irrevocable trust can lower your estate’s tax burden so that your beneficiaries – not the government – will keep a higher share of your estate. 

Many people opt into irrevocable trusts for the security they offer, serving as a valuable defense against creditor claims. This can allow you to effectively pass down generational wealth to your heirs.

Drawbacks of an Irrevocable Trust

Creating an irrevocable trust does have some drawbacks, such as loss of control. Once you place assets into an irrevocable trust, you cannot remove them and take them back. Managing the trust may be more difficult as you cannot sell off trust property for your own personal benefit. For this reason, you may not want to put all of your assets into the trust. It may be wiser to keep some property separate so that it is there and under your personal control if you need it. 

You will also have a very hard time making changes to the trust. However, an irrevocable trust is not completely irrevocable – under the right circumstances, there may be legal mechanisms for making changes. For instance, the practice of decanting allows you to transfer the assets in your trust with amended terms (Texas Property Code Sec. 112.072). Your lawyer can help you keep some degree of flexibility in a trust if necessary. 

Do Irrevocable Trusts Avoid Probate?

Probate refers to the process by which the executor of a deceased person’s estate validates a deceased person’s will with the court, followed by a full accounting of the deceased person’s assets. It can take a long time for probate to resolve. It may take even longer if somebody challenges the will, or if the deceased person died without a will in place. Even if you include clear instructions in your will, it will still have to go through probate.

One of the benefits of setting up a trust, irrevocable or not, is that the assets held in the trust can bypass probate. This allows for a more direct transfer of property after your death, which can save your beneficiaries time and money. If you anticipate any questions about your will, setting up an irrevocable trust may be in your best interests. 

What Assets Can I Put in an Irrevocable Trust?

Irrevocable trusts have many practical uses in the estate planning process. They can be used to secure different kinds of assets, including:

• Real estate, including your home, vacation houses, and rental properties

• Patents, copyrights, and other intellectual property

• Investment portfolios

• Cryptocurrency

• Limited liability companies

• Bank accounts

Our attorney can go over your estate with you to figure out how you want to distribute your most valuable property.

Call a Comal County, TX Estate Planning Lawyer

An irrevocable trust is a powerful tool in estate planning, but you should weigh the advantages and drawbacks before establishing one. Geoff Mayfield, Attorney at Law is skilled at helping clients create the trust that is going to work best for them.  

Our experienced Wilson County, TX trust attorney will help you understand all your options and come to the right decision. Call 210-535-0870 for a free consultation.