A revocable living trust is a popular estate planning tool that you can use to determine who will receive your property when you die. Most living trusts are revocable because you can change them as your circumstances or wishes change. Revocable Living Trusts Are Alive Because You Create Them During Your Lifetime. A revocable trust is part of estate planning that manages and protects the grantor's assets as the owner ages.
The trust can be modified or revoked as desired by the grantor and is included in estate taxes. Under the instructions of the trust, a trustee could be assigned to manage the assets or properties within the trust. The trustee is also responsible for distributing assets to beneficiaries. The trust remains private and becomes irrevocable after the grantor's death.
A revocable living trust can be a powerful estate planning tool. Generally, a revocable living trust is a type of trust that can be canceled at any time and the grantor of the trust is both the trust and the beneficiary (allowing control of the assets of the trust). A trust can be revocable, which means I can revoke it. It also means that I can change it.
So if I don't like the way I'm doing in life, I'll just change it. That is one of the beauties of this revocable trust. Other trusts are irrevocable and there are certain estate planning needs for an irrevocable trust, but we won't talk about that today. Now my trust can also be established while I am alive and that is why it is called a living trust.
Another type of trust is called a testamentary trust, that is the one that was established in my will and again we will save the testamentary trust for another day. With an irrevocable living trust, you cannot modify or cancel the trust without the approval of everyone named in the trust. While assets held in an irrevocable trust are generally beyond the reach of creditors, that is not true with a revocable trust. With a revocable living trust, you do most of the work upfront, making the disposition of your estate easier and faster.
If the grantor experiences health problems during the seniority process, a revocable trust allows the grantor's chosen manager to take control of the principal. A revocable trust is a trust by which provisions can be modified or canceled depending on the grantor or originator of the trust. A living revocable trust is a legal document created during its lifetime that allows the grantor or creator to re-title assets in the trust's name and select a trustee to manage the trust assets for their benefit (and their beneficiaries). Revocable and irrevocable trusts are intended to be used for different purposes and therefore each is best suited for those purposes.
In this situation, a successor trustee is also appointed to take over after the grantor's death to administer the revocable trust and distribute the assets. However, because it is a living trust that is revocable, you retain control of assets, even if they no longer belong to you, as long as you are alive. An irrevocable trust cannot be changed or altered once established, and the trust itself becomes a legal entity that owns the assets held in it. Upon death, assets held in the revocable trust evade succession, meaning that assets can pass to heirs without involving the courts, which can be time-consuming and costly.
The living trust allows you to make changes (or amendments) to the trust document while you are alive, at your own discretion. This means that because the assets of a revocable trust still belong to the trust, creditors could go after the assets to satisfy a judgment. .