Revocable Trust

A revocable trust, which is also called a living trust or inter vivos trust, is a legal arrangement in which a grantor transfers ownership of assets into a trust for the benefit of a designated beneficiary. The grantor appoints a trustee to manage the trust, which can be themselves, another individual, or even a corporate trustee. In contrast to an irrevocable trust, a revocable trust can be changed or revoked during the grantor’s lifetime. Assets that are transferred into a revocable trust might include investments, real estate, bank accounts, etc. 

One of the key benefits of a revocable trust is that assets held within it are typically allowed to bypass the probate process when the grantor passes away. Not only does this enable beneficiaries to receive inheritance more quickly, it allows for greater privacy for the grantor and beneficiaries. Unlike a will, which becomes part of public record during probate, a revocable trust is typically able to remain confidential. 

A revocable trust typically does not have the same level of protection from creditors or estate taxes that an irrevocable trust might, as the assets within a revocable trust are still considered part of the grantor’s taxable estate. However, revocable trusts may still be used instead of or in combination with irrevocable trusts for the flexibility they provide the grantor in the ability to amend or terminate the trust.