What Is a Revocable Trust and What Is It Used for?
A revocable trust is a long-term arrangement, usually detailed in a written document, that states how assets will be managed by a trustee during the lifetime of the creator of the trust (called the “settlor”) and how those trust assets will be distributed at the settlor’s death. A revocable trust is also known as a “living trust” or “inter vivos trust.” One or more settlors can create a trust.
For a self-settled revocable trust the settlor and initial trustee are usually the same person. A successor trustee (and alternates) are usually named in the document to take over as trustee upon the incapacity or death of the settlor/initial trustee. The successor trustee has a fiduciary duty to manage the trust assets according to the terms of the trust and for the benefit of the beneficiaries of the trust.
Revocable trusts are most commonly used for probate avoidance and to legally shield assets from Medi-Cal recovery by the State of California. A properly drafted, executed, and funded revocable trust is an important part of estate planning and passing trust assets on to your intended beneficiaries.
Allred Law specializes in creating customized revocable trusts for individuals and families.