What Are Revocable Living Trusts?

 What Are Revocable Living Trusts?

All trusts are a type of legal contract between three parties:

  • The Grantor, also known as settlor, trustmaker, or trustor, is the person who forms the trust.
  • The Trustee is the “manager” of the trust, whose job is to carefully follow the terms of the trust.
  • The Beneficiaries are the individuals who may receive income or principal from the trust.

When a revocable living trust is formed, one person typically serves in all three roles as grantor, trustee, and beneficiary, during his or her lifetime.

Creating the Trust:

The first step is to create the trust document which provides instructions for the trustee concerning how the assets should be managed and distributed.  This document looks similar to a last will and testament but contains additional provisions concerning the management of property during the grantor’s life and the ultimate distribution of assets over time.  The trust document would answer the questions of what, to whom, how, and when the assets should be distributed.


A revocable living trust can be changed or modified at any time by the grantor of the trust so long as he or she has capacity.  From the grantor’s perspective, the trust assets continue to be completely available for his or her use.

Successor Trustees:

Although the grantor often serves as the initial trustee, successor trustees should be named in the event the grantor dies, becomes incapacitated, or is unable to serve.  This list of trustees allows the trust to pass seamlessly and the terms of the trust to be carried out.

Funding the Trust:

Once the trust is formed, the next step involves the transfer of the grantor’s assets into the trust.  For example, the grantor’s bank accounts are re-titled in the trust, the grantor’s house is deeded into the trust, and the grantor’s life insurance beneficiary is changed to the trust.  By transferring all of the grantor’s assets into the trust, no assets will be held in his or her name alone.  Accordingly, by removing the assets from the grantor’s name, a probate process, along with the consequent delay, hassle, and expense, is avoided.

Pour-Over Will:

A pour-over will serves to transfer into the trust any assets that someone might still own in his or her name alone at the time of death.  The objective is to be sure that this will does not have to be probated.  In other words, the grantor of the trust wants to be sure that all of his or her assets have already been transferred to the trust.  However, it is always possible for someone to pass away without having transferred everything into his or her trust, and it is good practice to have the pour-over will as a back-up or safeguard.

By utilizing and fully funding a trust, the grantor’s estate avoids the various problems associated with probate.  Moreover, the assets can be held and distributed in the exact manner desired by the grantor.  The result is that the grantor’s wishes for his or her estate are given effect more efficiently.

A trust can greatly benefit a client and his or her family, but an in-depth understanding of the trust’s operation and benefits should be understood.  If you believe a trust or other estate plan may benefit you, please contact one of Clark, Mize & Linville, Chartered’s attorneys to discuss your situation.

Written by:     Joshua C. Howard 

Related Practice Area:          Wills, Trusts and Estate Planning