Reasons for establishing a revocable trust
Revocable trusts are usually established in an effort to avoid probate. In addition, two advantages of a revocable trust are that as the trustee of the trust you can control the assets in the trust and you can control the terms of the trust.
How a revocable trust can avoid probate
When you die, your revocable living trust becomes an irrevocable trust (since you are no longer alive to make changes to the trust). Because you are no longer the trustee, any assets in the trust become the property of the successor trustee of the trust, who will have the legal authority to act on behalf of the trust. Since the assets in the trust are no longer your property, they cannot be accounted as part of your estate. Since the assets are not a part of your estate, they do not need to go through probate. Thus, when you die, the person who takes the trust over from you can immediately begin taking the necessary steps to distribute the assets in the trust to the beneficiaries of the trust, without having to wait for the court’s go-ahead.
Control of assets in the trust
Under a revocable living trust, you can be the sole trustee of the trust and can continue to control the assets in the trust just as you did before the assets were in the trust. This means that you retain the right to sell, give away, invest, or otherwise manage the property in the trust, just as you would have before the assets were in the trust.
Control of terms of the trust
Under a revocable living trust, you can control the terms and conditions of the trust, and can change those terms and conditions however and whenever you like. This means that you can change the beneficiaries of the trust or the terms or conditions under which beneficiaries will receive the property in the trust. In addition, you can revoke or terminate the trust whenever you want.
To learn about irrevocable trusts, see our article Irrevocable Trusts.