The Reciprocal Trust Doctrine (RTD) is a judicial principle (i.e., formed from case law under our common law system) that basically states that you can't have your cake and eat it, too. You should be aware of it when creating trusts as part of your estate plan. The Purpose of Irrevocable Trusts There are two main reasons to use an irrevocable trust. The first is to reduce estate taxes. On a federal basis, that tax starts for a married couple at a net worth of $30 million [2026 — visit our annual numbers page to get the most up-to-date figures] . Assets placed into an irrevocable trust are no longer part of your estate. More importantly, the increase in value and any income produced by the asset is also outside of your estate. That means you don't have to pay estate taxes (as much as 40% federal plus sometimes a state tax as well) on that increase. The second benefit of an irrevocable trust is an asset protection benefit. The asset no longer belongs to you. It belongs to the trust.…