How does a revocable trust affect a UITF?

A revocable trust allows the trustor (the person who creates the trust) to maintain control over the assets within the trust during their lifetime. This type of trust can be altered or revoked by the trustor at any time, and as such, it does not provide a final transfer of assets until the trustor passes away.

As it pertains to a UITF, when assets are placed within a revocable trust, they remain part of the trustor's estate for tax purposes. This means that the value of any UITFs held in the revocable trust will still be included in the overall value of the trustor’s estate when determining estate tax liabilities. However, the presence of a revocable trust does not change the treatment of UITFs in this respect; they are considered part of the trustor's estate until the trustor dies and the assets are distributed according to the terms of the trust.

Thus, it is accurate to say that a revocable trust indicates UITFs are effectively still part of the trustor's estate while they are alive. Once the trustor passes away, the trust becomes irrevocable, and the assets can then be distributed according to the trust terms, thereby changing their status.