What IS a Revocable Living Trust? - Ask The Attorney

Q: What Is a Revocable Living Trust?

A: To explain revocable living trusts, known by our office as "RLTs," I like to use an analogy.

Let’s say you’re a child and have a little red wagon. You take your Barbies, your G.I. Joes, your toy cars, and you put all of them in your wagon. If you’re walking along the sidewalk and trip and fall, what happens?

Well, you trip and fall...but your toys stay in your wagon. The wagon serves a purpose. It keeps things together so that if something happens, the handle can be picked up by someone else and they can just keep walking.

The RLT is just like the little red wagon. It is a vessel, meant to hold your items in a way that provides the easiest transfer upon disability or death. However, just like the wagon, if you don’t put your “toys” (accounts, real estate, etc.) inside your trust, it doesn’t work in the way it was intended.

Also, the trust, just like the wagon, doesn’t change your things. If I put my Barbie inside my little red wagon, is it still my Barbie, correct? Same with the trust. If you put your checking account into the trust, it is still your checking account. The trust, like the wagon, is a vessel - a tool, when used properly, to make life (and death) easier.

Now, of course, in real life, a trust is just a pile of paper.  But when you put your items properly inside (known as trust funding), it works just like that little red wagon...and helps you cross the line of disability or death, and avoid probate.

Click here to read more about Revocable Living Trusts.

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Prefer to listen? Click here to listen as attorney Nicole Wipp discusses Revocable Living Trusts.

Curious to learn more? Read everything you need to know about revocable living trusts - click here.

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This blog post and answer is not legal advice. It is for informational purposes only. For legal advice on your specific situation, consult with a qualified elder law attorney.