A revocable living trust is a trust, created during lifetime, which may be revoked or changed by the creator (the “grantor”) of the trust at any time and for any reason. With a revocable living trust, the settlor can be both the trustee of the trust (i.e. control what happens with the property in the trust) and a beneficiary of the trust (i.e. receive the benefits of the trust, such as income generated by the trust).
This type of trust is used frequently to manage assets for an elderly or incapacitated person. In this use, the trust becomes a substitute for a power of attorney.
Many people use this type of trust to avoid probate.
A revocable trust does not provide any type of creditor protection or income or estate tax advantage.