Revocable
A revocable Trust is a document (called a “Trust Agreement”) wherein the Grantor (also Settlor) elects to manage his/her assets during their life time and distributes same after his/her death. After all it is the Grantor/Settlor’s Trust and, it’s revocable. The Grantor/Settler may also appoint any other person, a bank or Trust company to serve as Trustee.
As a Revocable Trust, a Grantor/Settler may amend, modify or terminate a Trust Agreement at any time during his/her life; provided, they are not declared incompetent or incapacitated. Most Trust Agreements permit the Grantor/Settlor to withdraw money or dispose of other assets at any time. In the event one becomes incapacitated, the Trust, through the Successor Trustee, will continue to manage the assets of the Trust, pay bills and, continue to make investment decisions. A Successor Trustee may avoid the need for a Guardian to be appointed. The Trust Agreement will give the Successor Trustee all the power he/she needs to carry out the intent of the Grantor/Settlor.
One’s assets, such as real estate, automobiles, bank accounts and other investments, must be transferred to the Trust to avoid probate of these assets. The Successor Trustee will execute the wishes of the Grantor/Settlor and distribute the remaining Trust assets to named beneficiaries. If ownership of the asset is not transferred (called “funding” the Trust), that asset remains in the probate estate upon death, and must be probated to transfer to heirs/beneficiaries.
Irrevocable
An Irrevocable Trust that may NOT be revoked after its creation. A Trust created by a deposit of money, in the name of another as Trustee, for the benefit of a third person, would be an Irrevocable Trust.
Amendments/Codicils
Any Amendment/Codicil to a Trust is a separate document which modifies or amends one or more articles, as stated in the Trust. What may NOT be amended, however, is the irrevocability of the Trust.
