What is true regarding the cancellation of an irrevocable trust?

An irrevocable trust is established with the intent that once it is created, it cannot be altered, modified, or canceled by the grantor. This characteristic distinguishes it from a revocable trust, which allows the grantor to retain control and make changes as desired.

The purpose of an irrevocable trust often includes asset protection, tax benefits, or ensuring that the trust's assets are managed in a certain way for the beneficiaries. Because the grantor effectively relinquishes ownership and control over the trust assets, cancellation is not an option. As a result, the trust cannot be reversed, ensuring that the assets remain within the trust and are distributed according to the established terms, protecting them from creditors or estate taxes depending on the circumstances.

Other options do not accurately reflect the nature of an irrevocable trust—cancellation is not permissible, nor is it deemed easy to modify or cancel on demand. Therefore, the essential understanding of an irrevocable trust’s nature leads to the conclusion that it cannot be canceled once established.