Revocable living trusts are increasingly popular. In most revocable trusts, you (the trust creator) are also the trustee and the beneficiary. Therefore, you remain in control of the assets you place in the trust and you can receive any investment income from the trust assets.
Why would you go to the trouble of transferring assets from one pocket (existing accounts) to another pocket (a revocable trust)?
* Incapacity protection. You might reach the point where you are unable to manage your own affairs. The trust might say that your doctor must affirm your incompetency, in writing. Then a successor trustee whom you’ve named will take over. Your successor will have a legal responsibility to use the trust assets for your benefit.
* Probate avoidance. At your death, trust assets will be distributed by the successor trustee, as per your wishes. There may be outright bequests or trust assets might be kept in trust. Either way, the assets held in your trust will not be subject to the time and expense of probate proceedings.