Which of the following is a common type of trust used in estate planning?

The correct answer identifies revocable living trusts as a common type of trust used in estate planning, which is significant for several reasons.

Revocable living trusts are popular because they offer flexibility for the grantor, allowing them to modify the terms of the trust or revoke it entirely during their lifetime. This adaptability can be incredibly beneficial for individuals whose circumstances may change, such as shifts in family dynamics, financial situations, or personal preferences. The ability to retain control over the assets within the trust while still providing a mechanism for managing those assets in the event of incapacity or death makes this type of trust user-friendly and efficient in avoiding probate.

In contrast, living trusts that cannot be altered, as mentioned in the first option, are not standard in estate planning because the very nature of a living trust is to be flexible and changeable while the grantor is alive. Irrevocable trusts, referenced in the second choice, can exist, but stating that they "cannot be created" is misleading, as they are indeed created frequently, albeit with the understanding that they cannot be modified after establishment. Lastly, a testamentary trust, which is established through a will upon the testator's death, does not align with this context as it is not created during the