What is a Revocable Living Trust?

A Revocable Living Trust is a type of ‘inter vivos’ trust (i.e. a trust made between living people – also called a “Family Trust”) used for estate planning purposes. Under the Revocable Living Trust agreement you, as the creator of the Living Trust, declare yourself trustee of the trust and then transfer some or all of your personal property to the trust. The legal ownership of the property passes from you personally to the trust. However, as trustee of the trust you maintain control over and use of the trust property.

 

As creator of the Revocable Living Trust, you can, at any time, either revoke the Living Trust or call for the return of some or all of the property transferred to it. You can also add assets to the trust, change the terms of the trust and even make it irrevocable (incapable of change) at any time in the future.

 

After your death, the assets in the Revocable Living Trust will pass to the beneficiaries that you have named in the Living Trust agreement in much the same way that they would under a Will. Specifically, your Living Trust agreement will nominate a person known as the “successor trustee” (which is a little like an executor or personal representative) who will have the responsibility of transferring ownership of the assets in the trust to the beneficiaries named in the trust document following your death. In most cases, the whole transfer process takes only a few weeks.

 

From an estate planning perspective, one of the most important features to note is that since the assets in the Living Trust are legally owned by the trust, they will not form part of your probatable estate at the time of your death. As such, there will be no need for any of these assets to go through the probate process; nor are any of those assets available to settle debts from your estate (other than taxes which might be due). This, in turn, allows for the speedy distribution of those assets to the beneficiaries named in the Living Trust Agreement. Once all of the assets are transferred to the beneficiaries, the Living Trust ceases to exist.

Revocable Living Trusts are very easy to establish and manage and, apart from avoiding probate, there are many advantages to using Living Trusts as part of your overall estate plan. These reasons relate to the management of your assets during incapacity, privacy, tax and more.

 


 

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Living Trust

Make Your Own Living Trust And Avoid Probate

 

This book will guide you step-by-step through the process of creating your very own living trust, transferring assets to your living trust and subsequently managing those assets. All required forms are included.


Updated Edition Published December 2010

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Related Articles

Living Trust Article What is a Revocable Living Trust?

Living Trust Article Advantages of a Revocable Living Trust


Living Trust Article How to Avoid Probate


Living Trust Article How to Make a Revocable Living Trust

 

 

 

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