Revocable trust, also known as a living trust or revocable trust allows owners of the trust to modify its terms whenever they want. They can designate new beneficiaries, remove pre-existing ones and also change the management process of the assets placed within the revocable trust. This living trust enables the owner to avoid probate as well as any additional cost and issues that come with it.
With a living revocable trust, you can keep your assets and properties private and provide access to your immediate family in the unfortunate event of your demise. This legal document requires you to nominate a trustee who is responsible for managing your assets and holding the title in an efficient manner. As the grantor of the trust, you can make changes to it as you desire up until you pass.
When it comes to creating a living revocable trust, there are mainly three phases involved. The first phase is when the grantor is well and alive. The second phase is when the grantor is disabled and the third phase is when the grantor is deceased.
In the first phase, the grantor is required to make a legalized document with clauses that allow them to use the stored assets for their personal use while they are alive. For the second phase, the grantor is required to explicitly state the conditions and terms of the trust in the case they become disabled. Lastly, in the third phase, the trust cannot become subject to any kind of changes as it automatically gets converted from a revocable trust to an irrevocable one.
These articles include detailed information about revocable trusts; how these trusts work, how to set them up and some myths to keep an eye out for!