Revokable Trust

As far as the Internal Revenue Service is concerned, trust property belongs to the grantor. The grantor names a trustee to manage the assets, but during their lifetime, most people name themselves in this position. A successor trustee is named to carry on when the grantor dies or becomes incapacitated.

Key Takeaways. A revocable living trust is a trust document created by an individual that can be changed over time. Revocable living trusts are used to avoid probate and to protect the privacy of the trust owner and beneficiaries of the trust as well as minimize estate taxes.

At the most basic level, a revocable living trust, also known simply as a revocable trust, is a written document that determines how your assets will be handled after you die.Assets you place in the trust are then transferred to your designated beneficiaries upon your death.

Irrevocable Trust: An Overview. A revocable trust and living trust are separate terms that describe the same thing: a trust in which the terms can be changed at any time. Trusts are also a way to reduce tax burdens and avoid assets going to probate.

A Revocable Living Trust DefinedAssets can include real estate, valuable possessions, bank accounts and investments. As with all living trusts, you create it during your lifetime.

Creation of a Trust To create a trust, the property owner (called the "trustor," "grantor," or "settlor") transfers legal ownership to a family member, professional, or institution (called the "trustee") to manage that property for the benefit of another person (called the "beneficiary").

Funding a Trust Is Expensive... This is the major drawback to using a revocable living trust for many people, but it's not worth the time, money, and effort to create one if the trust isn't fully funded.