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Irrevocable: Unable to Change, Reversed or Recovered

By March 21, 2012October 24th, 2018Estate Planning Blog, Robert Lamm

There is a good article posted about donor’s remorse on WSJ Online called “The Rush to Avoid Gift Taxes.”  The article can be found by clicking here and discusses the perils of making gifts to irrevocable trusts.

As I’ve said before, the problem with an irrevocable trust is that it is irrevocable. So, once the gift is made, it is gone. To address this concern, individuals may want to consider making a part gift or part sale to an Intentionally Defective Grantor Trust. That way, they can make a complete transfer for gift tax purposes while at the same time retaining an income stream from revenue generated by the asset transferred to the trust.