Question 1

What is a Revocable Living Trust and how does it work?

Accepted Answer

A Revocable Living Trust is a legal arrangement where you transfer ownership of your assets into a trust during your lifetime. You serve as both the trustee and beneficiary, maintaining full control of your assets. When you pass away, a successor trustee distributes the assets to your beneficiaries according to your instructions, without the need for probate court.

Question 2

Can I change or cancel my Living Trust after it is created?

Accepted Answer

Yes. A Revocable Living Trust can be amended or revoked at any time as long as you are mentally competent. You can add or remove assets, change beneficiaries, or modify any terms. This flexibility is one of the key advantages of a revocable trust over an irrevocable trust.

Question 3

What does it mean to fund a trust, and why is it important?

Accepted Answer

Funding a trust means transferring ownership of your assets from your individual name into the name of your trust. This includes real estate, bank accounts, investment accounts, and other property. An unfunded trust provides no probate protection because the trust only controls assets it actually holds. Proper funding is one of the most critical steps in the trust process.

Question 4

What does a trustee actually do?

Accepted Answer

A trustee is the person responsible for managing the assets inside a trust according to the rules the trust creator (the trustor) set. When you create a revocable living trust, you typically serve as both the trustor and the trustee, meaning the assets belong to you and you can do whatever you want with them. If you become incapacitated, your successor trustee steps up to manage the trust and its assets. Their job while the trustor is alive is straightforward: use the trust assets to take care of the trustor. After the trustor passes away, the trustee's job changes. Now they must distribute the assets exactly according to the rules written in the trust. They do not make the rules. They cannot change the rules. They follow them. Understanding the difference between these roles is important. The trustor (also called the grantor or settlor) is the owner and creator. They put assets into the trust, make the rules, and decide who benefits and when. The trustee is the manager who follows those rules. And the successor trustee is the person who takes over management after the trustor passes or becomes unable to serve.

Question 5

What do all the trust terms mean? Trustor, Trustee, Beneficiary and More

Accepted Answer

Trust documents use specialized terminology that can feel overwhelming at first. The trustor (also called grantor or settlor) is the person who creates the trust and puts assets into it. The trustee is the person who manages those assets according to the trust rules. The successor trustee takes over when the original trustee can no longer serve. A beneficiary is the person who receives assets from the trust. A beneficial owner is different from a beneficiary. The beneficial owner is the person who currently benefits from and controls the trust assets during their lifetime, which is usually the trustor. Understanding these terms helps you read your trust document with confidence and communicate clearly with your estate planning team.

Control and Protection With a Revocable Living Trust

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