Revocable trusts can be used for a number of different purposes, but they are most often used to minimize or eliminate the need for probate administration during life, in the event of a lifetime incapacity, or after death. While the creator of a trust – also known as a grantor, settlor, or donor – is alive, they exercise full control over the trust. Upon their death or incapacity, a named successor trustee manages the assets of the trust in accordance with the wishes of the creator. After the death of the grantor, his or her assets can be managed for the benefit of the beneficiaries and distributed to them without court oversight.
For individuals with assets in multiple states, a trust can be a useful vehicle to avoid ancillary probate, which is normally required when you pass away owning property in a state outside your state of residence.
For individuals with assets in excess of the federal or state estate tax thresholds, a revocable trust can be divided into separate shares upon the grantor’s death. Shares can be designed to take advantage of federal and state estate tax exemptions, while delaying the imposition of any estate tax until the death of a surviving spouse.