UK Accounting Glossary
A revocable trust is sometimes called a living trust. The grantor has the right to reclaim or revoke the property placed in a revocable trust, add assets to the corpus of the revocable trust, or even change the beneficiary(ies), among other changes/alterations. For example, the grantor of a revocable trust may adjust the provisions of the trust and earn income. A revocable trust is considered part of the grantor’s estate, due to its changeability, and is therefore subject to taxation: trust income from a revocable trust must be included in the grantor’s tax return as if the trust didn’t exist. Upon the grantor’s death, the revocable trust’s assets are transferred to the beneficiary(ies) – without being subjected to probate – and the revocable trust then becomes irrevocable. Unlike a revocable trust, an irrevocable trust offers tax advantages.
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This glossary post was last updated: 6th February 2020.