ANSWERS: 1
  • A trust is a written agreement naming one person to be responsible for managing the property for the benefit of another person. A revocable trust, sometimes called a living trust, is capable of being altered or ended at any time during the grantor's life.

    Features

    A revocable trust involves three parties: the grantor, or the person who sets up the trust; the trustee, or the person who accepts the property and manages it according to the trust agreement; and the beneficiaries, or the people who will receive income from the property and trust. It's possible to have more than one trustee manage a trust.

    Function

    A revocable trust can serve the same purpose as a will and provide for beneficiaries after the grantor's death, even specifying how the property is distributed. The difference is that a revocable trust turns over property to a trustee to manage while the grantor is still alive.

    Benefits

    A revocable trust can provide financial management and property management for a grantor who is no longer capable or interested in doing so. A revocable trust can also avoid probate court and avoid delays in distributing property to beneficiaries after the grantor's death.

    Types

    A revocable trust can be set up with little or no money in order to establish it for later use, such as during old age or during a health emergency. This is called an unfunded trust. The trust can then be funded over time.

    Facts

    Once the grantor dies, the revocable trust becomes an irrevocable trust, meaning it can no longer be altered or ended.

    Considerations

    State and federal governments consider income earned from a revocable trust to be taxable income.

    Source:

    LegalExplorer.com

    InvestorWords.com

    Investopedia.com

Copyright 2023, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy