With so few people having to worry about estate taxes nowadays, revocable living trusts have become a major focus of most estate plans. With a revocable living trust that is properly drafted and funded, you can protect your estate by ensuring that you have minimized, and potentially eliminated, the requirement of probate. What most people don’t realize, however, is that a revocable living trust can also protect you. How does it do this? Let’s take a look at a couple of important ideas.
One of the great things about a revocable living trust is that it not only gives you the ability to avoid or minimize probate, but it also does so in a way that doesn’t require much effort on your part. While it is true that people creating a revocable living trust have to ensure that they draft the trust instrument properly and successfully transfer their property into the trust name, you don’t have to do much more than that to get the most out of your trust.
This is because, at the time you create the trust, you will most likely name yourself as both the trustee and the beneficiary. This means that you will not only have the legal authority to manage trust property, but you’ll also be allowed to use that property for your own benefit. In other words, the property transferred into the trust’s name will never be outside of your control.
Management after Incapacitation
The big caveat to maintaining control over trust property comes in the event that you fall ill or become seriously injured. If you are ever unable to manage the property the trust owns, who will? What happens to that property in the event that you become incapacitated?
For answers to these questions, you have to look to the successor trustee. Just as you named yourself beneficiary and trustee when you created the trust, you will also have to select someone else who will be able to serve as a replacement trustee if you become incapacitated. This person or organization is called the successor trustee. The successor trustee will have the legal authority to begin managing trust property if and when you are no longer able to do so. Should you regain your abilities, the successor trustee can step aside, allowing you to once again resume your trust management duties.
Incapacity Plans Beyond Revocable Trusts
It’s important to note that a revocable living trust is not the only incapacity planning tool you will need. Other tools, such as powers of attorney and advance medical directives, will be equally important if you wish to protect yourself. If you’d like to know more about incapacity planning, come talk to us as soon as possible.