A Revocable Living Trust is a trust that is managed by the grantor and is for the benefit of the grantor during his lifetime. The property transferred to the trust avoids the individual's probate estate, but is included in the individual's grossestateestate. A grantor (the maker) of a revocable living trust retains the right to revoke the trust at any time prior to his/her incapacity or death. The grantor is usually the trustee during his/her lifetime and there is a trustee designated upon a triggering event such as death or incapacity to manage the trust and distribute the property pursuant to the grantor's wishes. Revocable living trusts are commonly used to avoid probate and to provide for management of the grantor's assets should he/she become incapacitated. Any income that the property of the trust generates during the grantor's lifetime is taxed to the grantor, just as it would otherwise be. There are no gift tax consequences because the grantor can take the property back. As mentioned, the benefits of the revocable living trust is to avoid probate, but other benefits include the great deal of privacy that a revocable living trust can provide. Finally, it should be noted that the revocable living trust does not effective for reducing estate taxes. For most people, this will be inconsequential as estate tax only applies to estates worth more than $5,340,000.