Legal Question in Wills and Trusts in

Re: Limits to Irrevocable Trusts

Any gift of any amount to an irrevocable trust is subject to federal transfer taxes and possibly state transfer taxes. The gift will use your unified credit against the federal transfer tax, however a Form 709 Gift Tax Return is required to be filed. A gift to an irrevocable trust may qualify for the "present interest gift tax exclusion" if the trust has what is known as withdrawal powers in the hands of the beneficiaries.

Since this is a complex area of tax law, hire an experienced estate and gift tax lawyer to advise you before you take any actions.