Revocable Living Trust

Many financial plans begin with a revocable living trust, because it provides flexibility and control.

A Flexible Performer

A revocable living trust does not save taxes, but it is a very flexible way to obtain specialized financial services that can protect you and your family. It can provide professional investment management that your disability or death will not interrupt.

Defined in simplest terms, a revocable living trust is a legal arrangement between two parties. The first person - the grantor or creator - establishes the trust. The second party, the trustee, holds and manages assets to benefit a third person - the beneficiary (not a true party, simply a recipient of the benefits). The name says "living" because this kind of trust takes effect as soon as the grantor creates it, and will continue during the grantor's lifetime (and even beyond if that is the grantor’s desire). The grantor can amend or revoke (“terminate”) the trust at any time.

Never Locked In

Once you have a revocable living trust you can revise it to keep up with changes in your finances or family. It is possible to:

  • Add assets or withdraw them from your trust
  • Change the responsibilities charged to your trustee
  • Change either of the two other parties concerned in the trust - to name one or more new beneficiaries or even to substitute a new trustee

The use of a revocable living trust, properly drafted by your attorney and administered by The Family Heritage Trust Company, may save a great deal of money for your surviving family members by incorporating a Family Trust. One of the most punitive taxes which wealthy individuals face is the federal estate tax. The tax is charged against estates that exceed the Lifetime Credit Amount. A properly prepared Family Trust provision, incorporated into your revocable living trust, can greatly minimize this tax.

In addition, you have nearly unlimited discretion to determine how the trust's income and principal will be distributed. When, in what amounts, and in what manner the trustee distributes money from your trust are yours to choose when you set up your revocable living trust.


Ed has had a successful career as a pediatric surgeon. He owns investment and personal real estate, plus a diversified securities portfolio. Ed set up a revocable living trust and transferred some of his investments to it. On his death, Ed's revocable living trust will provides for his remaining assets to be "poured over" to his trust, and Ed's advisor will make the investment decisions for his entire estate. Ed's wife and son, who are not at all interested in investing, won't have to become part-time property and investment managers. Ed has simplified both his estate and the financial lives of his heirs.

Peace and Protection

Your revocable living trust can provide peace of mind. In the hands of a professional trustee, you'll know your trust assets will be properly invested in accordance with your objectives. You'll stay informed and have the comforting assurance that your trustee is taking good care of your assets.

Probate avoidance. Another real advantage of a living trust is how it can protect your assets from probate. Any assets you place in your trust during your lifetime that continue in trust at your death need not be subject to probate. So, for those assets, your heirs will avoid the costs, delays, and publicity that the probate process may involve.

Protection against legal challenge. Your revocable living trust may be less vulnerable to legal contest than a will might be.

Protection against court-imposed guardianships.. Your revocable living trust can provide for the care of your minor children in the way that you judge to be best. A court-imposed guardianship is likely without such an arrangement. And the court may not know or choose to follow your wishes. Lastly, guardianships must terminate at a particular age as defined by the state, at which time the child then receives the assets.

Uninterrupted Care

Your trust will work for you during your lifetime, and you can be assured that it will continue to work for your family after your death. The possible arrangements you can make are very broad. A revocable living trust lets you decide and plan how to protect your assets and family.

Trustee Duties

The responsibilities of a trustee (or co-trustee) of your revocable living trust, include the following:

  • Collect all your trust income
  • Investing trust assets (not already invested)
  • Distribute the income, or reinvest it, as directed in your trust document
  • Maintain complete records for your trust
  • Prepare your trust's tax returns
  • Keep your trust assets safe in our custody
  • Work with your trusted advisor to adhere to your investment objectives

A revocable living trust has many advantages - providing continuity of investment management, protection for your financial affairs if you become disabled, simplified management for your estate, and more. You always have overall control because of the continuing option to make changes as needed.