A revocable trust is a living trust that can be modified or revoked by the grantor, or person who establishes the trust and transfers property to it.
The trust can be a useful estate-planning tool because, when you die, the assets in the trust pass directly to the beneficiaries you've named in the trust rather than through your will.
But because you haven't relinquished control over the assets, as you do when you transfer them to an irrevocable trust, they are still included in your estate. If its total value, including the trust assets, is greater than the exempt amount, federal or state estate taxes may be due.
For the same reason, during your lifetime, you continue to collect the income that the assets in the revocable trust produce, and you owe income or capital gains taxes on those earnings at your regular rates. That's not the case with an irrevocable trust, which has its own tax identity.