Which of the following best defines a Revocable Trust?

A Revocable Trust is a type of trust in which the creator, often referred to as the grantor or settlor, retains the right to modify the terms of the trust or even dissolve it entirely as long as they are alive and competent. This flexibility is a hallmark of revocable trusts, allowing the grantor to adapt the trust to changing circumstances, such as alterations in family dynamics, financial situations, or personal preferences.

For instance, if the grantor's family situation changes, they can easily update the beneficiaries or change how the assets are managed. This adaptability is a key reason many individuals establish revocable trusts as part of their estate planning, as it allows for more control over the distribution of their assets upon death.

In contrast, characteristics of the other options clarify why they do not define a Revocable Trust accurately: trusts that cannot be modified once established describe irrevocable trusts, while those requiring court approval to terminate would imply a level of judiciary oversight not typical of revocable setups. Additionally, trusts that protect assets from creditors typically fall under different classifications and are primarily associated with irrevocable structures, as revocable trusts do not provide such asset protection due to the grantor’s retained control.