Although it may be unpleasant to think about becoming disabled or incapacitated, without a plan to protect yourself you could become a victim of financial abuse. A revocable living trust is a valuable tool that can safeguard your assets and interests. A power of attorney for finances is also an important estate planning document that can help to ensure a trustworthy person manages your money should you become incapacitated. Regardless of your age, creating a plan with an experienced lawyer who provides estate planning services can give you peace of mind.
Benefits of a Revocable Living Trust
When you create a revocable living trust, you (the grantor) can transfer ownership of almost anything to the trust itself. As the grantor of the trust, you have control over the assets in the trust and may remove or add assets to the trust at any time. You must also name a successor trustee, who will automatically take control of the assets in the trust in the event of your incapacity.
In addition, you may offer specific instructions about the circumstances in which a successor trustee should take over. You can specify how the trust assets should be invested, the type of care you wish to receive, and which expenses you want the trustee to pay. When a living trust is created properly, there should be no need for court involvement to manage your assets.
Choosing A Successor Trustee
It is vital to choose wisely when naming a successor trustee. The person should be someone you know has your best interests in mind. It may be tempting to select someone just because they are your child or relative, but if they are not reliable or trustworthy, you could risk losing your financial security when you are at your most vulnerable. A good trusts lawyer will discuss your circumstances and options with you and give you a candid, objective perspective on who may be the best person to manage your finances. If you do not have a family member or close friend to serve as your successor trustee, you can name a fiduciary such as a financial institution, accountant, or attorney to manage the trust. Because it is a revocable trust, you can replace the successor trustee with someone else at your discretion.
Living Trust vs. Power of Attorney for Finances
Although a durable power of attorney for finances also allows you to appoint someone to take over your financial affairs if you become incapacitated, it does not shield your assets. A revocable living trust enables the assets in the trust to avoid going through probate upon your death and protects your privacy, as it is not part of the probate process or public record. A successor trustee can still manage the assets in the trust after your death, but a power of attorney is no longer in effect if you pass away. A probate or estate lawyer can help you understand the benefits and purposes of each document and advise you on what may best meet your needs.
Do you need assistance with estate or incapacity planning? The experienced team at Carosella & Associates can help you create a plan that protects you and your family.