A revocable trust is generally the centerpiece of an individual?s estate plan. A revocable trust is a document created by you to manage your assets during your lifetime and distribute the remaining assets after your death. The person who creates a trust is called the ?grantor? or ?settlor.?
The person responsible for the management of the trust assets is the ?trustee.? You can serve as trustee, or you may appoint another person, bank or trust company to serve as your trustee. The trust is ?revocable? since you may modify or terminate the trust during your lifetime, as long as you are not incapacitated. Upon the grantor?s death, the designated successor Trustee will step into the role and administer the distribution of the grantor?s assets.
A revocable trust is similar to a Will and serves as the grantor?s primary estate planning vehicle by directing the distributions of assets upon the grantor?s death. In the event the grantor should become incapacitated, the successor Trustee can immediately step in and act on the grantor?s behalf to manage the assets. Upon the grantor?s death, the successor Trustee will manage and distribute the assets of the trust to the beneficiaries named in the trust. However, and unlike a Will, a the trust has a separate legal identity and therefore assets passing from the Trust avoid the probate process saving significant expenses associated with probate. Further, a trust is a private document and does not have to be deposited.