Many people choose to include one or more trusts in their estate plan because of the numerous benefits a trust can offer to an estate plan. Trusts have evolved to the point where there is a trust that can be used to fulfill just about any estate planning objective. One common type of trust used in estate planning is the revocable living trust. If you choose to include a revocable living trust in your estate plan you will need to appoint a trustee to oversee the administration of the trust. You should also appoint a successor trustee for your trust. Who you should appoint as the successor trustee depends on several factors.
A trust can be either a testamentary trust or an inter vivos trust, more commonly referred to as a living trust. A testamentary trust does not take effect until your death while a living trust becomes effective as soon as the formalities of formation are complete and the trust is funded. A trust can also be either revocable or irrevocable. An irrevocable trust cannot be modified or terminated by the maker of the trust after it takes effect whereas a revocable trust can be modified, changed, or terminated at any time by the maker.
One of the most common reasons for creating a revocable living trust is for incapacity planning purposes. By using a revocable living trust you are able to name yourself as the trustee and transfer some, or all, of your assets into the trust. You then name a spouse, parent, adult child, or other individual as the successor trustee. The trust can specify under what conditions the successor trustee takes over. If you specify incapacity as an event that triggers the successor trustee’s take over, you effectively manage to shift control of the trust assets to the person whom you designate in the event of your incapacity without the need for court interference. This allows a very rapid and relatively simple shift of control of your assets in the event you become incapacitated.
If your reason for creating a revocable living trust is not for incapacity planning purposes, you need to ask yourself under what conditions the successor trustee will take over and who would you want to control the trust assets under those conditions?
If you have specific questions about trusts, trustees, or estate planning in general, consult with an experienced estate planning attorney.
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