What Is an Irrevocable Trust in Real Estate?

An irrevocable trust is a trust that, once created, cannot be easily changed or revoked. In real estate, these trusts are often used for asset protection, tax planning, and transferring property outside of a person’s taxable estate.

Irrevocable Trust: Simple Definition

An irrevocable trust is a permanent trust where control of real estate is transferred to a trustee. Unlike a revocable trust, the person who creates an irrevocable trust (the grantor) generally cannot modify or dissolve it.

Why People Use Irrevocable Trusts for Real Estate

Homeowners use irrevocable trusts to:

  • Remove property from their taxable estate for potential tax benefits.
  • Protect assets from lawsuits or creditors.
  • Preserve eligibility for Medicaid or other needs-based programs.
  • Ensure controlled property distribution according to trust terms.
  • Avoid probate for property titled in the trust.

Because the grantor no longer owns the property, it is generally shielded from future legal or financial claims.

How an Irrevocable Trust Holds Title to Real Estate

Real estate is transferred into an irrevocable trust by recording a new deed, such as:

“Jane Smith, Trustee of the Smith Irrevocable Trust.”

Once transferred, the grantor is no longer the legal owner. The trustee manages the property, and the beneficiaries ultimately receive the property according to the trust instructions.

Irrevocable Trust vs. Revocable Trust

The key differences include:

  • Control: Revocable trusts can be changed; irrevocable trusts cannot.
  • Ownership: Grantor loses ownership in an irrevocable trust.
  • Tax Benefits: Irrevocable trusts may provide estate or income tax advantages.
  • Asset Protection: Stronger with irrevocable trusts because assets are no longer owned personally.

Most homeowners use a revocable trust for flexibility and a specific irrevocable trust only when there is a tax or asset-protection reason.

Do Irrevocable Trusts Avoid Probate?

Yes—real estate titled in an irrevocable trust bypasses the probate process entirely.

This makes distribution faster and avoids court control, similar to how a revocable trust avoids probate once funded.

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