New York Law (NYLE) Practice Exam

In the context of trusts, an irrevocable trust is designed to be permanent, meaning that once established, the grantor generally cannot change the terms, revoke the trust, or reclaim assets placed into it. The fundamental characteristic of an irrevocable trust is that it relinquishes control and beneficial interest over the assets to the trust.

Since the trust in this scenario is irrevocable by its terms, the grantor is unable to revoke it even in the face of serious business setbacks. This is a key legal principle intended to protect the assets placed in an irrevocable trust from the grantor's creditors and from the grantor's own financial misfortunes, ensuring that the trust's beneficiaries can receive their intended benefits without interference.

In contrast, other options suggest circumstances under which a trust could be revoked, contingent on the consent of others, such as a son, grandson, or the trustee. However, these do not apply to an irrevocable trust unless there is a specific provision allowing for such actions, which is not indicated in the query. Thus, the correct understanding of the nature of irrevocable trusts supports the conclusion that the grantor cannot revoke the trust simply because it is irrevocable by its terms.