Quora Answer: Can Funds be Withdrawn from an Irrevocable Trust?

The following is my answer to a Quora question: “Can funds be withdrawn from an irrevocable trust?” 

An irrevocable trust is set up as a distinct legal entity from the settlor of the trust.  It is a type of trust where the terms of the trust document cannot be modified, be amended, or be terminated, without the permission of the beneficiaries.  Since the settlor effectively transferred all ownership of assets into the trust, he legally removed all rights of ownership to the assets, and to the trust. 

That being said, there are provisions within the trust document which can be added upon setting up the trust which allow a settlor to take control of some assets.  It cannot be done directly, since that would render the irrevocability of the trust null and void.  It can be arranged through a process of decanting, where there is provisions within the trust which allow specific assets or asset classes to be moved to a newer trust, one where the settlor is a trustee.  It could also allow for the trust to be folded into another trust.  All of this is ostensibly for the purpose of more effectively managing the assets in a trust.  Provisions could also be added to change the domicile of the trust across borders, if that is more advantageous. 

Another way of ensuring some control is to make a company one of the beneficiaries, or the only beneficiary, and have a beneficial relationship with that company.  This would involve arranging to be a trustee, or to have control of a trustee, and then being a controlling party in the beneficiary. 

Irrevocable trusts are “irrevocable” in the sense that assets vested in the trust have their ownership “irrevocably” transferred to the trust.  This “irrevocability” is a façade which can be arranged.  There are always ways around legalities.