Define: Revocable Trust

A revocable trust, also known as a living trust or inter vivos trust, is a legal arrangement in which an individual (the grantor or settlor) transfers ownership of assets or property into a trust, managed by a trustee, for the benefit of beneficiaries during the grantor’s lifetime. Unlike an irrevocable trust, which cannot be altered or revoked once established, a revocable trust allows the grantor to retain control over the trust assets and make changes or revoke the trust entirely at any time during their lifetime. The grantor typically serves as the initial trustee and beneficiary of the trust, maintaining full access to and control over the trust assets while alive. Upon the grantor’s death, the trust becomes irrevocable, and a successor trustee assumes control to distribute trust assets according to the terms outlined in the trust document. Revocable trusts are commonly used for estate planning purposes to avoid probate, provide for the management of assets in the event of incapacity, maintain privacy, and facilitate the efficient transfer of assets to beneficiaries upon the grantor’s death.

A revocable trust is a trust that can be changed or terminated at any time by the grantor (the creator of the trust) during the grantor’s lifetime.

A revocable trust is sometimes called a living trust. The grantor has the right to reclaim or revoke the property placed in a revocable trust, add assets to the corpus of the revocable trust, or even change the beneficiary(ies), among other changes/alterations. For example, the grantor of a revocable trust may adjust the provisions of the trust and earn income. A revocable trust is considered part of the grantor’s estate, due to its changeability, and is therefore subject to taxation: trust income from a revocable trust must be included in the grantor’s tax return as if the trust didn’t exist. Upon the grantor’s death, the revocable trust’s assets are transferred to the beneficiary(ies) – without being subjected to probate – and the revocable trust then becomes irrevocable. Unlike a revocable trust, an irrevocable trust offers tax advantages.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March 2024.