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Revocable trusts, also referred to as living trusts or inter vivos trusts, are established during the lifetime of the creator (grantor) of the trust, rather than in a decedent's will. The grantor retains the right to amend or revoke the trust, and is often a trustee and a beneficiary of the trust during his or her lifetime.
The revocable trust is most often used as an estate planning device. Some of the more common reasons for establishing a revocable trust include the avoidance of probate of the assets in the trust when the grantor dies, greater privacy as compared to probate and estate administration, which is of public record, the avoidance of court supervision, including the filing of an inventory and accountings, and other reasons important to the grantor.
Simply stated, the grantor creates the trust during his or her lifetime, conveys assets to the trust, disburses income and principal for their own benefit, and provides in the trust for the disposition of the trust assets when they die, including perhaps the establishment of trusts for children or others. Normally a "pour over" will is also prepared to provide for the disbursement to the trust of any the grantor's property not conveyed to the trust during the grantor's life time.
As mentioned above, revocable trusts are not normally subject to court supervision, and therefore, are not a major consideration in the administration of a decedent's estate, except to the extent that a personal representative must disburse probate assets to the trustee of the trust, or perhaps cooperate with the trustee on certain tax issues.
Trustees of revocable trusts, though, like personal representatives and trustees of testamentary trusts, are fiduciaries and must perform fiduciary duties as established under the terms of the trust and applicable law. They face the same liability as other fiduciaries if they fail to properly fulfill those duties. Again professional assistance in understanding and meeting the obligations of a fiduciary is recommended.
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