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 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 revocable trust is a legal document that allows the grantor (the person creating the trust) to take your personal assets and transfer them to trust ownership during your lifetime. Contrary to popular belief, revocable living trusts offer very little asset protection if you retain an ownership interest, such as appointing yourself as a trustee. By offering flexibility and privacy, revocable living trusts can be a valuable part of your estate plan.
A revocable living trust allows you to maintain control over the assets you have placed in the trust, but there are certain circumstances in which an irrevocable living trust is the best option. When it comes to estate planning, a commonly used tool is a revocable living trust, also called a revocable trust or “living trust.” In this situation, a successor trustee is also appointed to take over after the grantor's death to administer the trust revocable and distribute assets. Upon death, assets held in the revocable trust evade succession, meaning that assets can be passed to heirs without involving the courts, which can be time-consuming and costly. A revocable trust is part of estate planning that manages and protects the grantor's assets as the owner ages.
After creating a revocable trust, the assets must be re-titled in the trust's name because assets that are not formally held in the trust still have to go through probate and will not be under the management of a successor trustee in the event of disability. Compared to wills, revocable trusts provide greater privacy, as well as more control and flexibility over the distribution of assets. 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. 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.
A revocable living trust is often used in estate planning to avoid probate court and disputes over the assets of an estate. Unlike an irrevocable trust, the revocable living trust does not confer tax or credit protection. With a living revocable trust, assets can be distributed to the grantor and, upon death, a “successor trustee” distributes the assets in accordance with the trust's statutory dictates. 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.