What is a "revocable trust" or "living trust"?

A revocable trust, also known as a living trust, is a legal agreement in which the person creating the trust (known as the grantor) transfers their assets to a trustee, who manages the assets on behalf of the beneficiaries named in the trust. One of the key features of a revocable trust is that the grantor retains the ability to modify or revoke the trust during their lifetime, hence the name "revocable" trust. This flexibility is one of the main advantages of a revocable trust compared to an irrevocable trust, which cannot be modified or revoked once it is established.

Revocable trusts are often used as an estate planning tool because they can help avoid probate, a legal process that can be time-consuming, expensive, and public. With a revocable trust, assets that are transferred into the trust during the grantor's lifetime can pass directly to the beneficiaries named in the trust after the grantor's death, without the need for probate. This can provide peace of mind for the grantor and their beneficiaries, as it allows for a smoother transfer of assets without the need for court involvement.

It's important to note that while revocable trusts can offer many benefits, they may not be suitable for everyone's estate planning needs. An attorney can help determine if a revocable trust is the right choice for your specific situation. Additionally, it's important to work with a qualified and experienced attorney to create and manage a revocable trust, as there are several legal and tax considerations that must be taken into account.