Advantages and Disadvantages of the Different Types of Trust

Please prepare a response post to the below, fully fleshing out the advantages and disadvantages of each type of the the following types of trusts -- Simple, testamentary, complex, irrevocable, and inter vivos.
Irrevocable trust “refers to any trust where the grantor cannot change or end the trust after its creation” (Irrevocable Trust, n.d.). There are many kinds of irrevocable trusts, it can be treated as a simple, complex, or grantor trust, depending on the powers listed in the trust instrument. Setting up trusts is an effective tool when it comes to managing wealth in estate planning, an irrevocable trust can provide the advantages of asset protection and tax savings. When a grantor transfers assets to an irrevocable trust, the control over the transferred asset will be relinquished to the trust which cannot be modified except in limited circumstances. This feature enables asset protection from the creditors as they are no longer legally owned by the grantor unless the court finds that the transfer was made with the intention of defrauding creditors (Two Types of Trusts, n.d.). Therefore, having adequate estate planning in advance is important in this aspect. In addition, assets in an irrevocable trust will be removed from the taxpayer’s taxable estate as the ownership is transferred to the trust. It’s another benefit as this reduces the estate tax liability of the taxpayer.
While an irrevocable trust has the advantage of asset protection through its feature of irrevocability, it also comes with the flip side of losing control over the assets for any unpredictable changes. If taxpayers find themselves struggling financially, they cannot sell the assets in an irrevocable trust to regain financial security.
As a separate entity from the grantor, the trustee must file a tax return (Form 1041) on behalf of the trust to report income earned more than $600 during the tax year (Internal Revenue Service, n.d.). If any distribution is made to the beneficiaries, the trust must prepare schedule K-1 and will be able to take a distribution deduction on the tax return. Beneficiaries who receive income from the trust are responsible for any tax liability it may have incurred, and the income received will retain the character as earned by the trust.