Irrevocable trusts are a tool that you can use to remove assets from your estate. There are two key purposes for doing this. First, taking assets out of your estate may make it so that they are not eligible for other people to get them. If you’re involved in litigation or high-risk issues, setting up irrevocable trusts to transfer asset ownership to other people (family members or others) is an important thing to think about. The second reason for doing it is to reduce the size of your estate. If you make a gift of an asset into the irrevocable trust, giving it to someone other than yourself or your wife, it removes it from your estate in today’s value. The appreciation is in the irrevocable trust and belongs to the beneficiaries of the trust. Now when you make a gift, your basis transfers over at the time the gift is made. Whatever your basis is is the basis of that asset in the irrevocable trust. A lot of clients love this tool and they have assets that they know they want to give to their children, and we get an appraisal of the asset and transfer it into the trust.