The Meaning of a Revocable Trust
A trust is a legal document that puts control of a person's assets in the hands of an individual named as the trustee. The trustee manages assets for eventual transfer to trust beneficiaries when the trustor passes away. A trust can be irrevocable or revocable, with a revocable trust being one a trustor can terminate at any time.
Other People Are Reading
-
Characteristics
-
A revocable, or living, trust provides instructions for the disbursement of trustor assets, such as property or money, to trust beneficiaries at the time of death. These instructions are amenable, meaning the trustor can change or terminate instructions at any time prior to death.
Administration
-
A trustor can retain control of assets and appoint a successor trustee to take over control if he or she becomes unable or unwilling to continue.
-
Benefits
-
A revocable trust can prevent the need for an estate to go through probate while still allowing the trustor to retain control of assets during his or her lifetime. In addition, a revocable trust can ensure a person of your choosing will manage your assets if you become unable to do so.
Considerations
-
A revocable trust is not the same thing as a Last Will and Testament. While both allow you to distribute assets according to your wishes after death, only the revocable trust can assist you during your lifetime. Another difference is that a will becomes a document of public record while a revocable trust remains private.
Warning
-
A revocable trust will not prevent beneficiaries from having to pay federal and state death tax.
-
References
Resources
- Photo Credit signing a contract image by William Berry from Fotolia.com
