A revocable living trust is an account that is set up as a separate legal entity that is capable of "owning" assets. The individual who creates and funds the trust is called the grantor. He/she can transfer any type of property into the living trust. This might be a house, certificates of deposit or other investments, cash, or anything else that has value. Since the trust is revocable, the decision to keep the assets in the trust is not permanent (until the grantor dies). This allows a great deal of flexibility in handling the property placed in the trust.

A living trust can be passed to a new beneficiary at any time during the grantor's life or distributed to an heir upon the grantor's death. If land is placed in a trust, title remains owned by the trust even if the beneficiary's interest in the land is sold to another person. A revocable living trust is not administered by the executor of an estate. Instead, it is handled by a trustee. This method of transferring assets to heirs can significantly reduce probate fees. However, a trustee (either a financial institution or individual) may need to be paid for administering the trust.