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Granter/Settlor: The individual who creates the trust and may transfer assets into it.
Trustee: The person who manages the trust and carries out its obligations, wielding fiduciary responsibility.
Beneficiary: The individual or entity that benefits from the trust, often an heir of the granter.
Revocable Living Trust (RLT)
A revocable living trust (RLT) is designed primarily to avoid probate, not to protect assets or confer tax advantages. It is a common misconception that an RLT serves as a legal umbrella for asset protection. While it can facilitate a more orderly distribution of assets upon the granter’s death, it lacks income tax advantages and remains disregarded by the IRS—meaning it is treated as non-existent for tax purposes.