A revocable trust—also known as a revocable living trust—is a trust that can be amended, modified, or terminated by the grantor, settlor, or trustor (person who created the trust) after it is created—and the grantor, settlor, or trustor may remove assets from the trust at any time. For example, a grantor, settlor, or trustor who terminates a revocable trust may recover the trust property or assets and any undistributed income.
Because a revocable trust may be revoked at any time it does not offer the tax benefits that an irrevocable trust offers. But a revocable trust may provide income from the assets to the grantor during the grantor’s lifetime and may allow the beneficiaries to avoid probate court, guardianship, or conservatorship proceedings, depending on the circumstances.
Laws vary from state to state but the grantor, settlor, or trustor usually must specify in the trust agreement that the trust is revocable or it will be considered irrevocable.
In Texas, a revocable trust, also known as a revocable living trust, is an estate planning tool that allows the person who creates the trust (grantor, settlor, or trustor) to maintain control over the trust assets during their lifetime. The grantor has the flexibility to amend, modify, or terminate the trust, and can remove assets from the trust at any time. To ensure that the trust is considered revocable, Texas law requires that the trust agreement explicitly state its revocable nature; otherwise, it is presumed to be irrevocable. While revocable trusts do not provide the same tax advantages as irrevocable trusts, they do offer benefits such as potentially avoiding probate, which can save time and money for the beneficiaries after the grantor's death. Additionally, revocable trusts can provide income to the grantor during their lifetime and may help in avoiding guardianship or conservatorship proceedings.
