revocable trust

Revocable Trust

A trust whereby provisions can be altered or cancelled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries.

Notes:

This type of agreement provides for flexibility and income to the living grantor, as he/she is able to adjust the provisions of the trust and earn income, all the while knowing that the estate will be transferred upon death.

See also: Beneficiary, Estate, Irrevocable Trust

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Revocable trust

A trust that may altered as many times as desired in which income-producing property passes directly to the beneficiaries at the time of the grantor's death. Since the arrangement can be altered at any time, the assets are considered part of the grantor's estate and they are taxed as such.

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revocable trust

A trust that may be terminated by the grantor or that is set up to terminate automatically at a specific date. Revocable trusts are often used to turn daily decisions regarding certain assets over to someone else. They are also used to reduce probate fees, to reduce delays in distributing assets, and to keep assets from becoming a matter of public record. A revocable trustan important estate-planning toolmay serve to reduce federal estate taxes but generally will have no effect on income taxes. Compare irrevocable trust.