Key Features of a Revocable Trust

From Our “Ask a Question” Mailbag: “My neighbor has been talking about the Revocable Trust he is using to avoid probate. I also noticed that many New Jersey shore homes are owned by Revocable Trust to avoid probate in two states. I am curious, what are the key features of a Revocable Trust?”

What is a Revocable Trust?

A revocable trust, often referred to as a Living Trust, is a legal tool that allows you to maintain control over your assets during your lifetime but then avoid probate at your death. Unlike Irrevocable Trusts, you retain the right to change the trust at any time, including the option to “revoke” the trust and take all assets back into your name.

Key Features of a Revocable Trust.

• Flexibility and Control: You retain control. As the Grantor (the person who creates the trust), you keep the power to manage the trust as the trustee. If you select another trustee, you keep the power to remove and replace that person at any time.
• Avoid Probate: At your death, the TRUST owns the assets, not you. This means no Will is filed with the court, Register, or Surrogate. The probate process is avoided, saving time and money. The savings in time and expense are doubled if you have probate in two states, so a Revocable Trust is even better for those with real estate in two different states as you avoid two probates.
• Privacy: When an executor files a Will, and probate commences, the process becomes a public record. This allows heirs and creditors to examine all the information to determine if they have a claim. A Revocable Trust is not filed. By avoiding probate, your matters remain private.
• Changeability: You can change the trust’s terms at any time, as well as remove and replace assets whenever you wish. Until you are dead or lose capacity, a Revocable Trust can be changed at any time.

Most people think of a Revocable Trust as a tool to avoid probate. While this is true, a revocable trust serves other purposes, such as setting up a system where your family can quickly assist you with your assets without you giving up control.

Three Main Parties to Every Revocable Trust.

• The Grantor: At times called the Trustor or perhaps the Settlor, the Grantor is the trust’s creator.
• Trustee: The person or entity (such as a bank or trust company) oversees the trust assets and determines how they are used for the beneficiary.
• Beneficiary: The person or people who “benefit” from the trust.

Revocable Nature.

By “Revoke,” I mean that the trust can be ended at any time. The assets in the trust then return to the Grantor.

No Asset Protection.

Because you keep the power to revoke the trust and take back the assets at any time, the trust is not protected from creditors. A Revocable Living Trust is a tool to avoid probate, not to shelter your assets from creditors.

In Conclusion, What Are the Key Features of a Revocable Trust:

If you want to know more, please read my article, Revocable Living Trusts: Everything You Need to Know.

I hope you found this short article about the Key Features of a Revocable Trust. Contact us if you want to know more or have an estate that needs our help. Let our Probate and Estate Planning lawyers help walk you through what can be a confusing process. Feel free to contact our office for a free consultation. It’s All We Do: 

Wills, Trusts, Probate, and Estate Litigation!

It’s What We Do!

Peter Klenk, Esq. Pennsylvania Revocable Trust Lawyer, New Jersey Revocable Trust Attorney

Tags: Revocable Trust