What type of trust cannot have its terms changed?

Prepare for the Maryland Title Insurance Test with targeted multiple-choice questions, including hints and explanations for each to help you succeed. Get ready to ace your exam!

An irrevocable trust is a type of trust that, once established, cannot have its terms changed or revoked by the person who created it (the grantor). This characteristic is critical because it provides a certain level of permanence and security for the beneficiaries, as their interests in the trust assets become fixed and cannot be altered by the grantor after the trust's creation.

Irrevocable trusts are often used for estate planning, asset protection, and tax benefits, as the assets placed into such trusts are removed from the grantor’s estate for tax purposes. This means the grantor relinquishes control over the assets, which can be a strategic move to ensure that assets are managed according to specific intentions without the risk of future alterations or access by the grantor.

This contrasts with revocable trusts, which can be modified or revoked by the grantor at any point during their lifetime, reflecting their flexibility. Testamentary trusts are created through a will and take effect upon the individual's death, and intervivos trusts (or living trusts) can also be either revocable or irrevocable. However, the defining feature of an irrevocable trust is its inability to be changed or dissolved once it is established, making it a unique tool in estate and financial planning.

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