• A revocable trust allows a grantor access to her assets during her lifetime.american trust image by taitanojt0 from Fotolia.com
  
  A revocable trust, or revocable living trust, allows a grantor to maintain a measure of control over the property and assets he puts into a trust. Since the trust owns the assets, the trust can avoid probate costs and estate taxes. The grantor can also amend or revoke the trust at any point during his lifetime. An individual or married couple can set up revocable living trusts.
  
  

Parties

• A revocable trust document must name at least three parties. The grantor creates the trust. She decides which of her assets she will put into the trust and names the trustee and the beneficiary. The trustee distributes and manages the assets and property according to the trust document. The grantor can name herself, another individual, a bank or trust company as trustee. A co-trustee or successor trustee manages the trust if the main trustee becomes ill or disabled and cannot manage it himself. The beneficiaries receive the trust benefits. Beneficiaries do not receive any assets until the grantor passes away.
  
  

Funds

• The trust assets comprise of the property and other valuables the grantor transfers into the trust. In some states, a grantor can begin with an unfunded revocable living trust in which he does not put anything at the time he creates it. Some other states require a small fund to make the trust valid, such as $100. When the grantor transfers assets, such as his money or property, he funds the trust. To create a funded revocable trust, the grantor will put a majority of his assets into the trust, but not necessarily all of them.
  
  

Tax

• The Internal Revenue Code § 676 considers revocable trusts as grantor trusts, and if a grantor serves as trustee over the revocable trust, that trust becomes taxable. The grantor will become the owner of the assets while the trust itself becomes a separate tax entity. The grantor must include all income or losses associated with his trust assets on his tax returns.
  
  

Probate

• Some revocable living trusts allow a grantor's assets to avoid probate after her death. The executor does not include assets in the probate proceedings. The assets will transfer directly to the co-trustee or beneficiaries.