What is a revocable living trust?
A revocable living trust is a legal arrangement in which you transfer assets into a trust during your lifetime, name yourself trustee, and specify who inherits when you die — while keeping full control. It avoids probate, keeps your affairs private, and can be amended or revoked at any time.
How it works in practice
You take three roles at once: grantor (you create it), trustee (you manage it) and beneficiary (you benefit from it). Day-to-day life does not change — you buy, sell and spend exactly as before.
The document names a successor trustee who takes over the moment you die or become incapacitated. Because the trust already owns the assets, no court has to appoint anyone, which is where the time and cost saving comes from.
Funding the trust is the step people skip
An unfunded trust does nothing at all. Assets still in your personal name at death go through probate no matter how well the trust document is drafted.
- Retitle real estate into the trust's name with a new deed
- Move bank and taxable brokerage accounts to trust ownership
- Assign business interests where the operating agreement allows it
- Leave retirement accounts alone — retitling them triggers tax; use beneficiary designations instead
- Sign a pour-over will to catch anything missed
What it does not do
It does not save income tax — the trust uses your Social Security number and everything is reported on your personal return. It does not reduce estate tax, because you retained control, so the assets remain in your taxable estate.
Those goals require an irrevocable trust, where you genuinely give up control.
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Cost, and when a will is enough
An attorney-drafted trust package typically costs $1,500–$4,000; online services run $300–$1,000. Probate commonly costs 3–7% of estate value and takes months, so the trust often pays for itself where real estate is involved.
A simple will is usually sufficient for a modest estate in a state with a streamlined small-estate process, and where the main assets already pass by beneficiary designation. A trust earns its keep with property in more than one state, a privacy concern, or a real risk of incapacity.
FAQ
Does a revocable living trust avoid probate?
Yes, for the assets actually retitled into it. Anything left in your personal name still goes through probate, which is why funding the trust matters as much as creating it.
Does a living trust save taxes?
No. A revocable trust is tax-neutral: income is reported on your personal return and the assets stay in your taxable estate because you kept control.
Can I change a revocable living trust?
Yes. You can amend or revoke it entirely at any time while you have capacity.
How much does a living trust cost?
Roughly $1,500–$4,000 through an attorney, or $300–$1,000 through an online service. Compare that with probate costs of about 3–7% of estate value.
Do I still need a will if I have a trust?
Yes — a pour-over will. It catches assets you never transferred into the trust and is the only place you can name guardians for minor children.
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