Revocable living trusts are quite popular for many people in estate planning. These trusts are set up and operate while the grantor is still alive and can help avoid probate court after the grantor dies.
Revocable living trusts are used to manage assets while the grantor is still alive. If the grantor becomes incapacitated, the trustee can continue managing the assets on the grantor's behalf without necessitating the appointment of a guardian. Since the trusts are revocable, which means that the grantor may terminate or amend it at any time, they cannot be used to avoid estate taxes, however.
These trusts are quite flexible. In many cases, the grantor will also act either as the trustee or as a co-trustee of the trust. Upon his or her passing, revocable trusts can provide a seamless method to pass assets on to intended beneficiaries. Alternatively, the trustee can continue to manage the trust assets for the benefit of the beneficiaries instead of passing the assets to them directly.
A revocable trust allows the grantor of it to maintain a significant degree of control during his or her lifetime. It can be a beneficial tool to use, depending on the goals of the grantor and the complexity of his or her estate. If the grantor has an estate that is large enough to be subject to estate taxes, he or she may want to instead discuss a different type of trust with his or her estate planning attorney. Some trusts do function to protect the estate from taxation. An estate planning attorney may advise his or her client to create an estate plan that contains a combination of different documents in order to cover all aspects of an estate. People should make certain that when they create trusts, they do so with a clear understanding of the goals they are wishing to accomplish.