There are three major benefits which can be achieved by establishing an irrevocable Trust: (1) income generated by the trust's assets can be removed from the settlor and split between the trust and its beneficiaries; (2) the assets are isolated in the trust and, thus, immunized from any future liabilities which the settlor may subsequently incur; and (3) any future appreciation in such trust-owned assets will be attributed to the trust and not its settlor.

The disadvantages, however, of an irrevocable trust often outweigh its advantages. For example: (1) any income retained by the trust will be taxed at a rate which is typically higher than that of any other individual or entity; (2) the income tax consequences will be extremely adverse in the event the settlor does not wish income to be distributed to beneficiaries for several years; (3) the settlor is prohibited from receiving any benefits (whether from income or principal) from the trust; (4) the settlor is prohibited from changing the beneficiaries or their interests in the trust; and (5) the trust may not be revoked.