What is a Revocable Living Trust?
A revocable living trust can be modified or revoked by the person who establishes and transfers property into the trust (grantor). This kind of trust can be a useful estate planning tool because when you die, assets in the trust pass directly to the beneficiaries you’ve named in the trust rather than through your will and the probate court system.
Generally, a revocable living trust will not impact your income taxes. Estate taxes can also be planned in a more streamlined way through a revocable living trust rather than just within a will. The revocable living trust will preserves the step up in basis for capital gains tax; therefore, your children (in most cases) will pay less tax after you have passed than if you had sold the asset during your lifetime.