Sorry, but
TOOL and LOOT are both wrong.
The rules on page 1 of this game say:
You need to change the word of your predecessor by exactly 1 letter. (The order of the letters is unimportant.)
omit vs tool = 2 letters changed (not okay)
loot vs tool = no letter changed (not okay)
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omit vs trio = 1 letter changed (okay)
trio vs toil = 1 letter changed (okay)
toil vs loot = 1 letter changed (okay)
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NEW WORD (deriving from loot) is:
toll