How Does a Revocable Trust Work?

A revocable trust is a tool that is commonly used in estate planning. Here are the basics of the revocable trust.

Revocable Trust

A revocable trust is a device that allows for certain provisions of the trust to be altered. The grantor of the trust can decide to change the trust while still alive. A revocable trust is set up with an official document that is created with the help of an estate planning lawyer.

Features

When you set up a revocable trust, you will be able to transfer assets into the trust. You can receive income from the assets in the trust. You will also be able to use these assets and govern what happens to them. Once you die, the assets in the trust will pass onto your beneficiary.

This provides you with some flexibility because you can designate assets to a beneficiary, but you will still be able to receive a regular income from them until the end of your life. After you die, you will be able to determine when and how your beneficiaries receive your assets. For example, if you want to hold off on giving a substantial estate to a young child until he or she reaches a certain age, you will be able to do so with the revocable trust.

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