A revocable trust is the central feature at the heart of a modern estate plan.

But what, exactly, is it?  And what does it do for you and your family?

Think of a trust as your own corporation. You, the trustee, are the CEO. That means you have all the decision-making power. Your beneficiaries are like the stockholders. They don’t make the decisions, but they stand to profit if the c-e-o makes good decisions. The trust assets are all the things owned by the corporation—from the factory building right down to the coffee maker in the lunch room.

When your trust is created, you—as the trustee—transfer all your assets to the trust. As CEO, you have the right to use the assets freely during your lifetime.

So what happens when you die?

That’s when the magic of the trust comes into play. Your beneficiaries—your stockholders—won’t have to go through the costly and time-consuming probate court process to account for all your assets.

Why?

It’s simple: you don’t own anything. The trust—like a corporation—owns all of your assets. When you die, a successor trustee you have appointed takes over as the new CEO. The successor trustee makes sure your assets are distributed to your beneficiaries as you wish, following your directions. Do you want your assets to be used for your childrens’ or grandchildrens’ education? How about for health issues?
Or for charitable purposes? It’s all up to you.

After all, you’re the CEO of your revocable trust.