Revocable Living Trusts provide the grantor(s) of the trust (the individuals who create the trust and provide the assets that fund the trust) the flexibility to make changes throughout their lifetime. The assets of a Revocable Living Trust generally remain registered to the Social Security Number of the grantor(s) during their lifetime and any income from the trust assets is generally reported on the grantor’s individual tax returns. While the grantors are alive and are not incapacitated, they have the ability to change the beneficiaries, assets, and distribution instructions of the trust.
When the grantor(s) of a trust dies, the Revocable Living Trust becomes Irrevocable, so that no changes can be made to the trust after death. This is to ensure the grantor’s wishes are honored and the assets are distributed accordingly.
Upon death, the person appointed to manage the trust must take specific steps to handle the estate according to the deceased’s wishes. This is a multi-step process which can take months or even years to complete. For this reason it is recommended that successor trustees contact their financial planner and estate planning attorney as soon as possible to create a strategy for the administration of the trust.