What is a revocable trust?
A revocable trust is an estate-planning document you create during your lifetime that you can change or cancel while you are alive. It is often called a living trust.

Why do people use a revocable trust?
Many people use it to avoid probate, keep their affairs private, and create a plan for management of assets if they become incapacitated. It can also make it easier for beneficiaries to receive assets without court involvement.

Who controls the trust while I am alive?
In many revocable trusts, the person who creates the trust also serves as trustee and keeps control over the trust assets during life. The trust can then name a successor trustee to step in later if needed.

Can I change a revocable trust later?
Yes. Under Wisconsin law, a revocable trust is generally presumed to be amendable unless the trust expressly says otherwise.

Does a revocable trust avoid probate?
Yes, for assets that are properly titled in the trust’s name or the trust is the beneficiary of an asset. If assets are not transferred into the trust, those assets may still go through probate.

What are the advantages of a revocable trust?
Common advantages include probate avoidance, privacy, quicker access to assets for beneficiaries, and help managing property if you become incapacitated. Some people also like the flexibility because the trust can be updated as life changes.

What are the drawbacks?
A revocable trust costs money to set up, requires ongoing maintenance, and does not by itself provide strong creditor protection or tax savings. It also must be properly funded, or it will not work as intended.

Is a revocable trust right for everyone?
No. It can be very helpful for some families, but others may not need the added cost or complexity. Whether it makes sense depends on your assets, family situation, privacy concerns, and whether you want to avoid probate.

What happens to bills after death if I have a trust?
A trust can provide cash to help pay bills, but debts and final expenses still need to be handled properly. The trust should be coordinated with the rest of the estate plan, so expenses, taxes, and creditor claims are addressed.

What is a grantor?
The grantor (also called settlor, trustor, or creator) is the person who creates the trust and funds it with assets. The grantor writes the trust terms and decides who benefits and how the property is managed.

What is a trustee?
The trustee is the person or institution that manages the trust assets according to the trust document. The trustee has fiduciary duties and must act in the best interests of the beneficiaries, keep records, pay bills and taxes, and make distributions as directed.

What is a beneficiary?
A beneficiary is the person or entity who benefits from the trust. The trust can name current beneficiaries who receive benefits now and remainder beneficiaries who receive assets later. Beneficiaries have certain rights to information and can enforce the terms of the trust.

What is a trust protector?
A trust protector is a person who is not the trustee or a beneficiary but is given specific oversight or decision-making powers over the trust. In Wisconsin, a trust protector can be granted powers such as interpreting trust terms, resolving disputes, or modifying certain interests, depending on how the trust is written.

What are powers of a Trust Protector?
These are some of the powers, there may be more: Review and approve the trustee's reports or accounting; modify or amend the trust instrument to achieve a different tax status or to respond to changes in federal or state law; remove, replace, or appoint a trustee or directing party or a successor trustee or directing party; removal or replacement of a trustee may be with or without cause; appoint assets to a new trust; correct errors or ambiguities in the terms of the trust that might otherwise require court construction or defeat the Grantors’ intent; allow the trust to be amended due to changes in the law; resolve disputes between trustees (if there is more than one) or between beneficiaries and the trustee(s); change distributions from the trust based on changes in the beneficiaries' lives; allow new beneficiaries to be added if there are additional descendants; and veto investment decisions

The Grantor may choose some or all of these powers, it is important to read the language of the trust.  

How are these roles different?
The grantor creates and funds the trust; the trustee manages and administers it; the beneficiary receives the benefits; and the trust protector, if used, has a special oversight or adjustment role defined in the trust document.

Can one person hold multiple roles?
Yes. In many revocable trusts, the grantor also serves as trustee during life and names a successor trustee to take over later. The same person can also be a beneficiary. A trust protector is typically a different person to provide independent oversight.

What happens if a trustee does not follow the trust?
Beneficiaries can ask the trustee for information and, if necessary, petition the court to remove the trustee or seek damages for breach of fiduciary duty. The trust protector, if one is named, may also have powers to address trustee issues.

Do I still have control over my property after I place it in a Living Trust?
Yes, A Revocable Living Trust can be amended at any time.  You may remain the Trustee of the Living Trust during your lifetime. You may transfer any asset into the Living Trust and take it out of the Living Trust just as you were able to before.  You may terminate the Living Trust at any time.

Will I have to file a separate income tax return for the Revocable Trust?
No, you may continue to report your income and deductions on your Form 1040.  The Trust is only required to file a separate return when it is made irrevocable by your death or by amendment. 

Will I lose property tax exemption?
No, the property tax exemptions for homestead are unaffected by the transfer of the property to a Living Trust.

Can the Living trust be used to avoid estate and inheritance taxes?
Yes. the Internal Revenue Code has allowed for an unlimited marital deduction and the portability election, which allows you to avoid being taxed up to an estimated 15 million for a single individual in 2026 and will rise with inflation for future years.  Current Estate Tax

Will a Revocable Living Trust protect me from Medicaid spend down and creditors?
No, a Living Trust will not protect you from Medicaid spend down or creditors. An irrevocable trust may protect you from both, if done correctly.


What are some types of Trusts?
There are many types of Trusts, and each has a different purpose, but these are some of the common ones.

1. Revocable Living Trust - The terms of the trust may be changed during the Grantor's lifetime but then becomes irrevocable when they pass away.
2. Irrevocable Trust -  The terms of the trust may not be changed or revoked.
3. AB Trust or Bypass Trust – Trust is divided into 2 Trust after the first spouse pass away.  The surviving spouse has one trust to use both income and principal during their lifetime. The second trust is irrevocable and doesn't leave property to surviving spouse but surviving spouse uses property throughout their lifetime.
4. Testamentary Trust – Trust made in your Last Will during Probate and is Court Supervised.
5. Charitable Remainder Trust (CRT) – Beneficiary is a Charity and has tax advantages.
6. Charitable Lead Trust – Charity gets income during Grantor's life, after death beneficiary gets assets that the Trust owns.
7. Funeral Trust – Can be irrevocable to pay for last expense and is not counted as an asset or a divestment when apply for Medicaid if done properly.  This is an insurance product.
8. Special Needs Trust – Provides for beneficiary who is receiving assistance from the government without having those assets be counted as an available asset.
9. Spendthrift Trust - Does not allow the beneficiary to sell or pledge away his or her interests in the Trust and is beyond the reach of the beneficiaries’ creditors, until the Trust property is distributed to the beneficiary.
10. Pet Trust – Trust which will care for the needs of your pets after you pass away
11. Off-Shore Trust - Trust which the money has been placed in another country’s banking system, mostly the Caribbean Islands, sometimes used to hide from our government or creditors – our government has enforced striker laws regarding these Trusts.
12. WisPact Trust - WisPACT offers two types of Special Needs Trusts: the Self-Funded Trust and the Third-Party Trust. These Special Needs Trusts will not be counted as an available asset, and disbursements from them will not be counted as income under the rules that apply to SSI and Medicaid. All WisPACT trusts have been approved by the Social Security Administration (who administers SSI benefits) and the Wisconsin State Department of Health Services (who administers Medicaid benefits) as meeting the requirements for Special Needs Trusts.  See WisPACt website.

Disclaimer
The information provided on these pages is intended for general informational and educational purposes only. It is not intended to recommend or endorse any specific estate plan, investment strategy, or tax plan. Because every person’s situation is unique, you should always consult with qualified attorneys, financial advisors, and accountants to develop a plan tailored to your individual needs.