In California a trust is often referred to as “revocable trust.” A revocable trust is a trust that the person who creates it can revoke during that person’s lifetime. Revocation restores the person to where he or she was before the trust was created.
A revocable trust can also be amended or restated. Amendment can change just one sentence or many paragraphs. Restatement changes the entire trust document. Only the name of the trust remains the same in a restatement.
One may ask, “why are the terms ‘revocable’ and ‘trust’ used together so often?” The answer is to distinguish from an irrevocable trust. Irrevocable trusts are permanent and cannot be changed without an order from the court.
Irrevocable trusts are created to reduce estate taxes. The estate tax is also called the “death tax.” Persons with assets over ten million dollars should be concerned about the estate tax. This is not a problem for most people. So, in California the vast majority of trusts are created to avoid probate.
Trusts provide for the post death transfer of assets at a minimum cost and effort. The vast majority of trusts in California are revocable trusts. Revocable trusts can be changed.
Author: Mark W. Bidwell