Revocable (Living) Trust
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Also known as a "living trust," a revocable trust is one that is created during the lifetime of the person creating the trust. It can be changed, amended or revoked at any time by the creator, also known as a grantor or trustor. The grantor retains complete control over the trust assets, even if he or she names a third party as trustee, as the grantor always retains the right to change or terminate the trust.
Advantages:
- Flexible - can be changed at any time and allows use of assets by grantor during grantor's life.
- Durable - allows assets to be managed through the trust in the event the grantor becomes disabled or incapacitated.
- Control - allows grantor to choose who will manage assets, not the courts or a sometimes improperly motivated family member.
- Private - trust administered and assets distributed, even after death, in a private setting, not in public probate proceedings.
- Avoids Probate - possible cost savings and reduction in delays of distributing assets.
Many times, prudent trust drafting includes the naming of a bank as either a co-trustee or successor trustee to administer the trust and manage assets during periods of the grantor's incapacity or after the grantor's death.
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