What is a revocable living trust?
There is often a lot of confusion regarding the types of trusts available. A revocable living trust is simply a probate avoidance device, whereas irrevocable trusts are typically created to avoid or minimize estate taxes. The creator (“grantor”) of a revocable living trust maintains full control over his or her assets during the grantor’s lifetime, but the grantor of an irrevocable trust no longer has control over his or her assets.
A revocable living trust is a trust created during the grantor’s lifetime by transferring assets to a trustee. The trust holds and manages these assets for the grantor’s benefit during his or her life and then distributes them to the named beneficiaries after the grantor dies. Most people who create revocable living trusts serve as the initial trustee and name successor trustees to replace them at death or if they become financially incapable. A revocable living trust avoids probate because assets are titled to the grantor as trustee rather than to the grantor as an individual. This is a common method to ensure those left behind do not have to deal with the courts when administering the decedent’s estate.