subject: Avoiding Living Pro bate with a Revocable Living Trust [print this page] Avoiding Living Pro bate with a Revocable Living Trust
The reason for having an incapacity plan is so that you and your family can avoid the unpleasant process known as Living Probate. Under the Living Probate process, if you ever become mentally incapacitated and don't have an incapacity plan already in place, the probate court will appoint a guardian and/or conservator to look after your personal and financial needs for you. Why do people want to avoid Living Probate? It can be time-consuming and expensive, it exposes your private medical condition to public scrutiny, and it puts the court in control of your well-being. When all is said and done, the person who is appointed to manage your assets and your personal life might not be someone you would have selected yourself.
Having an incapacity plan helps to put you in control of who takes care of you and your property, and the way in which they do it. A Revocable Living Trust can be an effective tool for helping you to avoid Living Probate, just like it helps your estate avoid probate at your death.
When you establish a Revocable Living Trust, you will not only appoint yourself to serve as initial trustee, you'll also choose a trusted friend or loved one to serve as successor trustee. If you later become disabled, your successor trustee will have the authority to step into your shoes and manage any assets you've transferred into the trust. In managing the trust assets, your trustee will be required to follow your written instructions contained in the trust agreement.
As long as your trust is fully funded, your successor trustee will be the person in charge of your financial life, without court interference or supervision. You'll need to plan carefully, though. Any property not transferred into your trust will be outside your successor trustee's control. So, as part of your incapacity plan, you'll likely also need a Durable Financial Power of Attorney. This document supplements your Revocable Living Trust by allowing you to appoint an agent to manage your non-trust property.
Your estate planning attorney can help you establish a Revocable Living Trust and put in place a comprehensive incapacity plan so that you and your loved ones can avoid Living Probate in the event of your disability.
