How a Living Trust Helps in Cases of Incompetence

Although most people create Living Trusts primarily to avoid the probate process that is required for Wills, another important use for a Living Trust is to plan for the possibility that you may need someone else to manage your financial affairs if you become disabled or incapacitated.

Unlike a Last Will and Testament, which only goes into effect after your death, a Living Trust is more dynamic and can go into effect when you are still alive in certain scenarios. For example, if you become physically or mentally unable to manage your financial affairs, a Living Trust can allow your appointed Successor Trustee to step in and manage your affairs.   

When you create your Living Trust, list two or three doctors who you trust to certify your incompetence when and if the time comes.  This will streamline the process so that your Successor Trustee avoids having to go to court to have your incompetence certified, a potentially embarrassing (and public) undertaking that will incur additional legal fees.

 

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.