A revocable trust, by definition, is a trust account that can be revoked. Specifically, trust accounts are accounts in which grantors deposit assets for the benefit of a beneficiary. Trust accounts can be quite simple, such as a trust account holding $100,000 for a grandchild until they become 18. Trust accounts can also be more complex, such as a trust account holding a rental property, and paying the rent proceeds out to a charity. Regardless, it’s a relationship between grantor and beneficiary that has been codified into the account itself.
A revocable trust is a trust that can be changed by the grantor. The grantor can decide to dissolve the account, or they can decide to change the terms of the account. A grandparent might have a trust that gives $5,000 to a grandchild every month, and may decide to limit this to $3,000 a month after they finish school. Many trusts are irrevocable but have a time period, such as charitable trusts that give money to charity for a ten year or twenty year term. A revocable trust is also notable because it uses the grantor’s own SSN, rather than its own EIN.