A revocable trust is perhaps the most commonly used trust in estate planning. In many ways, the language used in a revocable trust is similar to the language used in a will. The person establishing the trust—called the grantor—directs particular assets to pass to particular beneficiaries, and appoints people to manage and distribute the assets.
If properly set up, a revocable trust serves two main purposes.
- First, when the grantor dies, the assets in the trust will pass directly to the beneficiaries without passing through the probate system.
- Second, if the grantor becomes incapacitated, the person appointed as backup trustee can step right in and handle the assets with minimal fuss.