A Revocable Trust is a legal arrangement that allows the person who creates the trust, known as the grantor or settlor, to maintain control over the assets placed in the trust during their lifetime. This type of trust can be altered, amended, or revoked entirely by the grantor at any time while they are alive and mentally competent.
The primary purpose of a Revocable Trust is to manage the grantor’s assets both during their lifetime and after their death. While the grantor is alive, they can change the terms of the trust, including adding or removing assets and changing beneficiaries. Upon the grantor’s death, the trust typically becomes irrevocable, meaning it cannot be altered. The assets in the trust can then be distributed to the beneficiaries without the need for probate, which can simplify the transfer of wealth and avoid the public nature of probate proceedings.
Examples:
- If a grantor creates a revocable trust and transfers their home and investments into the trust, they can continue to manage these assets as usual. If they decide to sell the home or change who inherits it, they can do so easily by modifying the trust document.
- Upon the grantor’s passing, the trust document will dictate how the remaining assets are to be distributed, ensuring a smoother transition to the beneficiaries and often expediting the process compared to a traditional will that requires probate.
In Houston and surrounding areas in Texas, Revocable Trusts are commonly used as part of estate planning strategies. They can be particularly beneficial for individuals who wish to avoid the complexities and costs associated with probate court in Texas, as the state has specific laws and procedures that govern estate administration.
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