A trust is a means of transferring property—whether it is tangible or intangible— or funds from one party to another. A revocable trust, which is also known as a living revocable trust, is one that can be changed or revoked by the grantor of the trust. There are 3 individuals or entities involved in the creation of a revocable trust. The first is the grantor who creates the trust and has the right to make any changes or to terminate the trust upon any time during his or her lifetime. The second party is the manager of the trust or the trustee who handles all concerns of the grantor with regards to the trust. Lastly, the third party involved is the beneficiary, those who are to receive the estate of the trust.
In order to create a revocable trust, an attorney prepares a legal document, a trust agreement, wherein the grantor stipulates what assets are to be included in the trust and under what terms are these assets to be distributed to the beneficiaries. Once this is done, the grantor gives control to the trustee so as to manage the trust according to the terms of the grantor.
A revocable trust can be changed at any point in time by the grantor. However, the revocable trust becomes irrevocable upon the death of the grantor if the trust has not been terminated. No changes can be made when this occurs and the trustee must carry out the terms of the trust.