A revocable trust is defined as one that can be terminated or altered during the lifetime of the grantor. As the trust may be changed at any point of time before the death of the granter, it is regarded as a part of the former’s estate and is therefore liable to be taxed. The property is transferred to the beneficiaries following the death of the grantor and in this way the revocable trust becomes an irrevocable one. A revocable trust is also referred to as a revocable living trust.

A provision in such a trust can be changed at any point of time. The modification process of the trust terms is known as a trust amendment. If the trust holder does not like anything of the terms stated, then the entire trust can be revoked with the help of an amendment and restatement. Though a revocable trust has several benefits, the one negative aspect about the same is that all the assets are treated as the personal assets and therefore there is no creditor protection.

The reasons why many prefer a revocable living trust are as follows:

To avert a probate: The assets held against a revocable living trust at the time of the individual’s death will automatically be transferred on to the beneficiaries who are specified in the trust agreement.

To protect property privacy: As the assets are not liable to a probate, the trust agreement will not be made public. Therefore the details about your property will not be subject to the public eye and the details remain confidential.

If the individual who holds the assets becomes mentally incapacitated, then the property can be managed by a disability trustee in place of a conservator or a guardian appointed by the court.

It is necessary that you consult your legal advisor on issues pertaining to a revocable trust.