What is a revocable living trust?

A revocable living trust is an estate planning tool that is used to avoid probate and decide how a property is split up after the owner's death. It can be changed later by the person who set it up, as long as he is still mentally competent.

A revocable living trust functions in the same manner as a will, with a few additional benefits. However, it is more complicated and expensive than a will. The trust becomes irrevocable after the person who set it up passes away. A trustee is designated to oversee the trust and is the one to dole out the trust's assets to the beneficiaries after the person who set it up dies.