What is the role of a revocable living trust in estate planning?

The role of a revocable living trust in estate planning is to allow for the management of assets during incapacity. When a person establishes a revocable living trust, they place their assets into the trust and maintain control over these assets while alive. If that person becomes incapacitated, the terms of the trust allow a successor trustee to step in and manage the assets as specified in the trust document. This ensures that there is a seamless transition in asset management without the need for court intervention or a guardianship arrangement, ultimately facilitating the financial affairs of the grantor without significant disruption or delay.

In addition to this primary role, revocable living trusts offer flexibility since they can be altered or revoked by the grantor as long as they are alive and competent. This is in contrast to other estate planning tools that may impose restrictions once established. Furthermore, assets in a revocable living trust are not typically protected from creditors during the grantor's lifetime, and the trust does not require court approval upon the grantor's death, as it generally allows for the direct transfer of assets to beneficiaries, thereby bypassing the probate process.