How Does a Revocable Trust Work?

A revocable trust is a legal agreement that details who or what organizations receive a person's personal belongings, money or real estate. As suggested by the name, revocable trusts can be changed or dissolved at any point during a person's lifetime.

Parties

Three parties are involved in most revocable trusts. The trustor is the person who is starting the trust. In some cases, this may be a group of siblings, a married couple or other relatives who are forming a revocable family trust. The trustee is responsible for managing the trust and ensuring the trustor's property is distributed appropriately. The beneficiary is the person who ultimately receives the trust. This may be a single person, a charitable organization, the trustor's spouse, the trustor's children or another party chosen by the trustor.

Creation

In order to create a revocable trust, the trustor must obtain the services of an attorney preferably someone experienced in estate planning, wills and probate law. The lawyer creates a legal document, usually called a trust agreement that outlines the terms of the trust.

Advantages

A revocable trust can be changed while the trustor is still alive. This type of trust also avoids the costs associated with probate court. In addition, a revocable trust allows the property left to the beneficiaries to be distributed quickly. If the trust involves real estate across several states, the property can be transferred to beneficiaries without going through probate court in other states.