Also known as: revocable trust · living trust · living trusts
Written by attorneys · grounded in primary & secondary sources — see below
An inter vivos trust in which the settlor retains the power to revoke or amend the trust terms during the settlor's lifetime. The capacity required to create, amend, revoke, or add property to the trust is the same as that required to make a will.
Roger Ramirez, recovering from surgery, signed an amendment to his revocable trust replacing the trustee while still disoriented from medication. His daughter contested the change, arguing he lacked understanding of his assets and family at the time. The court applied the same capacity standard used for wills and invalidated the amendment because Roger could not form an orderly plan regarding his property and beneficiaries.
Raphael Rivera placed small undivided interests in family land into a revocable trust to avoid probate. A federal statute later restricted descent of those interests. Raphael's heirs challenged the restriction, claiming the trust did not adequately substitute for the right to pass property by inheritance or devise.
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Rita Russell's estate involved claims over assets held in her revocable trust. Her son filed a federal action alleging tortious interference with an expected inheritance from the trust. The court examined whether the probate exception barred federal jurisdiction over the trust-related claims.
Ricardo Rojas created a revocable trust and later obtained a state court ruling recharacterizing certain trust property. In a subsequent federal estate tax dispute, the IRS contested whether the state decree bound the federal determination of the property interests.
The capacity required to amend a revocable trust is the same as that required to make a will. A settlor must understand in a general way the nature and extent of the property, the natural objects of bounty, and the disposition being made, and relate those elements in an orderly plan. Evidence of delirium or confusion at the time of signing can invalidate the amendment.
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Property transferred to a revocable trust during life passes directly to beneficiaries upon the settlor's death without court administration. The trustee already holds legal title, eliminating the need for probate proceedings on those assets.
A revocable trust may be revoked or amended by a later will if the trust terms or applicable law permit it. Some jurisdictions allow revocation of will substitutes by will, though specific procedures in account contracts may still govern beneficiary changes.
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A revocation or amendment executed without sufficient capacity is invalid. The original trust terms remain in effect, and the court applies the same capacity standard used for wills to determine whether the settlor could understand the property, beneficiaries, and disposition.
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…the owners of these interests to effectively control disposition upon death through complex inter vivos transactions such as revocable trusts is simply not an adequate substitute for the rights taken, given the nature of the property. Even the United States concedes that total abrogation of the right to pass property is…