When Does a Revocable Trust Become Irrevocable?
A revocable living trust allows you to distribute your assets after death while managing them in life. By creating a trust and naming yourself as trustee, you retain control of your assets, but as they're held in the name of the trust, they don't pass through probate at your death. You can revoke a trust as long as you are competent and alive.
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Irrevocable
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Revocable living trusts become irrevocable when the grantor or settlor -- the person who created the trust -- dies. Only the grantor can revoke the trust, so death makes changes impossible. Control will pass to a successor trustee chosen by the grantor, but she can't revoke the trust; all she can do is carry out the grantor's instructions. If the grantor is incapacitated, the trust is effectively irrevocable until she regains the ability to manage her own affairs.
Revocation
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Revoking a living trust while you're competent and alive is a matter of paperwork. To revoke the trust, you, as grantor, write a revocation form -- meeting the requirements in your state law -- directing yourself, as trustee, to dissolve the trust and return the assets from trust ownership to personal ownership. You, acting as trustee, will then have to convey title to real estate in the trust back to yourself, and fill out whatever forms are needed to transfer ownership of investment accounts.
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Successor Trustee
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Choosing the right person to act as successor trustee after your death is essential. The trustee will be in a position to illegally exploit your assets, so it has to be someone trustworthy. It should also be someone who can manage your assets if decisions have to be made before they're distributed, or if you're incapacitated. Even if you have a perfect candidate, discuss it with her before you put it in writing: She may be unwilling, or see problems you haven't thought of.
Considerations
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Even if you set up a trust and place your assets into it, you'll probably need a will as well. A will can dispose of personal non-asset possessions such as books, clothes or furniture. A "pour over" will can do more: With it, you can transfer to the trust any assets that you never got around to placing in the trust during your lifetime. This ensures all your assets will bypass probate.
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