Revocable Living Trusts

What is a Revocable Living Trust?

A Revocable Living Trust is a legal document that holds ownership of your assets during your lifetime and provides instructions for how those assets should be handled after death. The person who creates the trust is called the Grantor. The Grantor usually acts as their own Trustee while living, maintaining full control over the trust assets.

The word “revocable” simply means it can be changed or canceled at any time while the Grantor is alive and mentally competent.

Why Having a Revocable Living Trust Matters

A properly funded Revocable Living Trust allows your estate to avoid probate entirely. That means your heirs can receive their inheritance faster, privately, and often at a much lower cost.

It also provides peace of mind. If you become incapacitated, your successor Trustee can step in to manage your assets without the need for a court-appointed guardianship.

What a Revocable Living Trust Can Do

• Avoid probate
• Keep financial matters private
• Allow seamless management of assets if you become incapacitated
• Protect young or financially inexperienced beneficiaries by managing distributions over time
• Handle property in multiple states without multiple probate proceedings

What a Revocable Living Trust Cannot Do

A Revocable Living Trust does not protect your assets from creditors during your lifetime.
It also does not offer tax advantages for estate tax purposes — though it can be used as part of a broader tax planning strategy for larger estates.

Revocable Living Trusts must be funded properly to work. That means retitling assets into the name of the Trust during your lifetime. Without proper funding, the Trust won’t achieve its intended benefits.

Pour-Over Wills and Trusts

Even if you have a Revocable Living Trust, you still need a Will.
A “Pour-Over Will” acts as a safety net, ensuring that any assets left out of the Trust during your lifetime are transferred into the Trust after death.

Who Needs a Revocable Living Trust?

While not everyone needs a Trust, many people benefit from one — especially if:

• You own real estate in more than one state
• You want to avoid probate for privacy or efficiency reasons
• You have a blended family or more complex inheritance wishes
• You want to provide for minor children or financially inexperienced beneficiaries

A Simple Example

Susan’s Story
Susan was widowed and owned a home in Texas and a vacation condo in Colorado. She wanted to make sure her daughter could inherit both properties without the hassle of two separate probate processes in different states. Susan worked with her attorney to create and fund a Revocable Living Trust. When Susan passed away, her daughter was able to immediately manage and sell the properties without ever stepping foot in a probate court.

Proper planning saved Susan’s family time, money, and stress during a difficult time.

How a Revocable Living Trust Compares to Other Estate Planning Documents

A Revocable Living Trust works alongside other important documents in your estate plan:

• Will: A Trust manages assets inside it. A Will acts as a backup plan for anything left outside the Trust. Learn more about Wills.
• Medical Power of Attorney: A Trust manages property and finances. A Medical POA appoints someone to make healthcare decisions if you’re unable to. Learn more about Medical Powers of Attorney.
• Financial Power of Attorney: A Trustee manages assets titled in the Trust, but a Financial POA manages assets outside the Trust, like personal bank accounts not transferred yet. Learn more about Financial Powers of Attorney.
• Durable Power of Attorney: A Durable POA remains valid through incapacity and can be used alongside your Trust for non-trust assets. Learn more about Durable Powers of Attorney.
• HIPAA Authorization: Even with a Trust, you still need a HIPAA Authorization to allow your Trustee or agents access to medical records if needed. Learn more about HIPAA Authorizations.

Each document handles a specific part of the bigger picture. Together, they create a complete and effective estate plan.

Final Thoughts

A Revocable Living Trust is often the cornerstone of a well-designed estate plan.
By avoiding probate, maintaining privacy, and allowing for easier management of assets during incapacity, a properly funded Trust can save your loved ones time, money, and stress when they need it most.