What is a Revocable Living Trust?
A trust is a legal relationship where property is held by one person (the trustee) for the benefit of another person (known as the beneficiary). The person who creates the trust is called a grantor (or trustor or settlor).
A Revocable Living Trust (“RLT”) is a special kind of trust. Typically, in a Revocable Living Trust, the grantor serves as the initial trustee and as the beneficiary while he or she is alive. This means that the grantor maintains complete control over the property while still alive. The grantor titles all of his property in the name of the trust. The grantor establishes, in the trust document, who will be his successor trustee. When the grantor passes away, his trust stays intact, with a successor trustee stepping into his shoes to wrap up his estate and make distributions to his heirs.
The result of this kind of trust is that the grantor owns nothing in his own name at his death because all of his assets are within the trust. Because his assets are not in his own name, he avoids the probate process.