Revocable Living Trust
What Is a Revocable Living Trust?
A revocable living trust is a legal arrangement that allows a person to place assets into a trust during their lifetime while maintaining control over those assets.
“Revocable” means the trust can be modified or canceled by the person who created it, often called the trustor or grantor.
Assets commonly placed in a revocable living trust include:
- Bank accounts
- Investments
- Real estate
- Personal property
The trust continues to manage these assets even if the trustor becomes incapacitated.
Why It Matters
A revocable living trust is often used to simplify estate planning and provide continuity in asset management.
Benefits may include:
- Clear instructions for managing assets
- Smooth transition of asset control if someone becomes incapacitated
- Organized distribution of assets to beneficiaries
Revocable living trusts are commonly used alongside wills in comprehensive estate plans.
How Revocable Living Trust Works
A revocable living trust begins when the trustor creates the trust document and transfers assets into it.
Example: A homeowner may transfer ownership of their home into a revocable living trust. The trustor can still live in the home and manage it normally.
If the trustor becomes incapacitated, the successor trustee can step in and manage the assets according to the trust terms.
Revocable Living Trust vs Irrevocable Trust
Revocable Living Trust → Can be modified or canceled by the trustor
Irrevocable Trust → Typically cannot be changed once created
Each serves different estate planning purposes.
FAQs About Revocable Living Trust
Do you still need a will if you have a trust?
Many people use both tools together as part of a complete estate plan.
Who manages the trust while you are alive?
Often the trustor serves as trustee until a successor trustee is needed.
Can a revocable trust be changed?
Yes. The trustor may modify or revoke it during their lifetime.
Related Terms
