A Revocable Trust is a legal arrangement that passes assets from the grantor to the trust during his lifetime and distributes them to his heirs or beneficiaries after his death. The grantor has the authority to change or revoke the trust while he is still alive.
It is also known as a living trust or revocable living trust and it ensures that assets are transferred to the grantor's beneficiaries, specifically, if the grantor dies unexpectedly or becomes incompetent.
To bypass probate court, most people utilize a revocable trust. Probate is a legal process that permits a will to be "proved" in court and recognized as a valid public document. Probate may be time-consuming and expensive, and it can sometimes be more of a burden than a help.
Despite the fact that this form of trust does not cover the whole estate of the grantor, it only applies to the trust's assets or properties. That means if the grantor intends to administer or convey a significant portion of his estate, or his whole estate, a different type of document, such as a will, may be necessary.
Use of this Term in Sentences
- Revocable trusts allow the living grantor to modify the trust's directions, withdraw assets, or dissolve them.
- Beneficiaries of revocable trusts can avoid probate court and guardianship or conservatorship procedures if they wish to.
- A revocable trust is beneficial because it gives the grantor freedom and peace of mind.