Are All Grantor Trusts Revocable?

May 5, 2017
Living Trusts

Most, but not all grantor trusts are revocable, but all revocable living trusts are grantor trusts.  Generally speaking, a grantor trust status does not hinge on whether a trust is revocable or irrevocable, but whether the grantor is responsible, in whole or in part for taxes on the income produced by the trust assets.  There are a number of myriad features of grantor trusts, but this is its distinguishing characteristic.

A revocable living trust is a grantor trust because among other reasons, the grantor created the trust, makes a transfer of his or her assets to the trust, has at least a 5% reversionary interest (right to at least 5% of trust principal), is the primary beneficiary of the trust, and is responsible for paying taxes on trust income.