A coordinated estate plan can authorize people you choose to manage your finances if you become incapacitated. In California, a successor trustee generally handles assets in your living trust, while an agent under a durable power of attorney may manage financial matters outside the trust, subject to the authority granted by the document.
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Who Manages Assets in Your Living Trust?
If you are serving as trustee of your revocable living trust and later become unable to act, the person named as successor trustee may be able to take over management under the trust's terms. The trustee can use trust assets for your benefit, pay appropriate expenses, and maintain property as authorized by the document. Learn more about what a successor trustee does.
What Happens to Accounts or Property Outside Your Trust?
A living trust does not automatically control property that was never transferred into it. A properly drafted durable power of attorney can give a trusted agent authority to handle certain financial matters outside the trust, such as dealing with institutions or managing other assets. Some assets and transactions may require additional steps or specialized authority.
Who Makes Health Care Decisions If You Cannot?
Financial incapacity planning is only one part of the picture. An advance health care directive can name someone to make medical decisions within the authority it grants. Appropriate medical-information authorizations can also help designated people obtain information when needed. See the firm's discussion of who makes decisions if you become incapacitated.
What If Your Incapacity Documents Are Missing or Outdated?
If no one has adequate legal authority to manage essential matters, family members may need to pursue a court-supervised conservatorship. Court proceedings can involve expense, delay, and reduced privacy. Even when documents exist, banks or other parties may need proof of authority before recognizing a successor or agent.
How Can You Reduce Problems Before They Arise?
- Confirm that your trust identifies a successor trustee and explains how incapacity is determined.
- Make sure the trust is properly funded and asset ownership is coordinated with the rest of your plan.
- Review your durable power of attorney and health care documents for completeness and accuracy.
- Tell appropriate trusted individuals where to find important documents.
For guidance on coordinating incapacity protections with a California estate plan, contact Kavesh, Minor & Otis or explore the firm's free estate planning seminar.
