A properly prepared and funded living trust can help protect you during incapacity by allowing a named successor trustee to manage assets held in the trust for your benefit. It can be a central part of a California incapacity plan, but it does not cover every asset or decision.
Table of Contents
- How Does a Living Trust Work While You Are Able to Manage Your Affairs?
- What Happens if You Can No Longer Act as Trustee?
- Can a Living Trust Help Avoid a Conservatorship?
- What Does a Living Trust Not Cover?
- Does a Revocable Living Trust Protect Assets From Your Own Creditors?
- What Should You Check in Your Incapacity Plan?
How Does a Living Trust Work While You Are Able to Manage Your Affairs?
With a typical revocable living trust, you generally serve as trustee and continue to control the assets you placed in it. You can manage those assets under the terms of the trust while you have capacity.
What Happens if You Can No Longer Act as Trustee?
Your trust should establish a process for determining incapacity and identifying when a successor trustee may take over. Once authorized, that trustee can manage trust property, pay appropriate expenses, and use assets for your care in accordance with the trust.
Can a Living Trust Help Avoid a Conservatorship?
It may reduce the need for court intervention concerning assets properly held in the trust. But it is not a guarantee that a conservatorship will never be needed, particularly if significant matters fall outside the trust or the available documents do not give someone sufficient authority.
What Does a Living Trust Not Cover?
A living trust usually does not grant general authority over assets titled outside the trust, nor does it by itself appoint someone to make your medical decisions. A durable power of attorney and appropriate health care documents are important complementary tools. Learn more about who makes decisions when you become incapacitated.
Does a Revocable Living Trust Protect Assets From Your Own Creditors?
Generally, a typical revocable living trust does not shield your assets from your own creditors while you are alive. That is a different issue from making sure your property can be managed if you lose capacity. More advanced asset-protection planning may require separate strategies.
What Should You Check in Your Incapacity Plan?
- Whether your living trust is properly funded.
- Whether the successor trustee and incapacity provisions are up to date.
- Whether your power of attorney and health care documents work alongside the trust.
- Whether trusted individuals know where your documents are kept.
For help coordinating these protections, contact the Law Firm of Kavesh, Minor & Otis or explore its free living trust and estate planning seminar.
