It is a common misconception that irrevocable living trusts cannot be changed. While that is true of the irrevocable trusts created to avoid taxes (tax reduction or avoidance trusts), it is not true of all irrevocable trusts.
An irrevocable living trust is created for the benefit of yourself or others. Once created, you as Grantor must give up your right to something. You may be prevented in your ability to control the trust or your access to your assets, but you get to determine to what extent.
Debtor/creditor law provides that whatever you are eligible to receive, your creditors are also able to get. There are known creditors (bank/credit card debt) and unknown potential creditors (unforeseen lawsuits, nursing home, and divorce).
An income-only irrevocable living trust permits you to receive the income on your assets, but you must give up your right to your principal. In some irrevocable living trusts, you can retain the right to change who gets your assets during your life and after your death and maintain 100% control of your assets until your mental disability or death.
Tax reduction/avoidance trusts are more restrictive. Typically, you cannot retain any right to control or access any of the assets in an irrevocable tax reduction/avoidance trust.
There are many irrevocable living trusts that are quite flexible and grantor-friendly. You should consult a qualified Nashville estate planning attorney to get counseling on all your options before creating an irrevocable living trust.
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