Definition

• A revocable trust is a legal instrument that can hold property on behalf of another. For example, a trust is set up to benefit another person or a particular cause (i.e., funding medical research). A revocable living trust is a particular type of trust used in estate planning that can be terminated or altered. Living trusts are also called "inter vivos trusts."
  
  

Players

• The person who sets up the living trust is called the grantor and original trustee. These two titles speak to unique powers. The grantor can specify where the trust assets go after his death. As trustee, he can re-title his personal assets and put them into the trust, and act with respect to the trust assets. The trust also names a beneficiary and a successor trustee. The beneficiary is the person who receives the trust assets after the death of the grantor. The successor trustee is the person who acts on behalf of the trust after the death of the original successor. The assets of the trust are also called the "trust res."
  
  

Avoiding Probate

• Revocable living trusts are a popular way to avoid probate, according to Save Wealth Estates. Probate is a lengthy, expensive, public procedure in which an executor is appointed and a probate court signs off on the actions of the executor. Since the proceeding is in a court, the will becomes a public document. By way of comparison, a revocable living trust is a quick, private way to transfer assets after death. It is very appropriate if you do not anticipate your heirs fighting over the disposition of your assets.
  
  

Variations

• Since revocable living trusts became so popular in the 1960s, they have been hawked by persons preying on older people, reports the National Consumer Law Center. Just as you don't trust your health to every quack that comes along, you shouldn't let the disposition of your estate be informed by junk mail or newspaper advertisements for free estate planning seminars. These instruments are not for everyone--and you want someone working on your behalf to help you make that decision.
  
  

Warning

• Many people establish a trust and fail to fund it under the mistaken belief that they will lose control of their assets. This is unfortunate, because unless a property goes into the trust, there is not benefit in establishing it. All manner of personal and real property can be retitled in the name of the trust. The National Consumer Law Center notes that the grantor retains control of the trust assets, and can revoke the trust at any time.