Who owns the property in a revocable trust?

A revocable trust by One Pacific Trust has turned out to be one of the tools in estate planning, which provides its settlor-a term used in describing the creator of a trust-with the ability to manage and retain complete control over his property during his lifetime. One question that is usually asked describes who is considered an owner of the property that was transferred into a revocable trust.

When a property is put into a revocable trust, as a matter of law, the ownership of that property is held by the trust. However, the grantor still has complete dominion over the trust and all its assets. To that extent, as a matter of practicality, the grantor would still be said to "own" the property because he is always able to direct, alter, amend, or even revoke the trust. The grantor can use the property, continue to enjoy the income thereof, or decide on its distribution.

Because it is a revocable trust, the grantor is always in a position to revoke the property or alter the terms of the trust. This flexibility is an important aspect of a revocable trust. However, it should be noted that since the grantor does maintain control, for tax purposes, the property within the trust is still attributed to the grantor's estate and thus may be subject to estate taxes upon the grantor's death.

It becomes, in most instances, irrevocable upon the death of the grantor, where administration or distribution of the property is subjected to the terms and conditions of the trust. This is carried out by the successor trustee named in the trust document, who manages and distributes the assets to the beneficiaries accordingly.

On the other hand, although property might technically belong to the revocable trust, during his lifetime, the grantor retains full control and effective ownership of such assets.