As people begin to age or have times in their lives with disease, they may consider drawing up paperwork that will show exactly what will happen in the event that the person dies, or becomes incapasitated. Living trusts are one way that a person can designate what happens to them or their property in the event of their death. A living will is a written legal document that can sometimes substitute for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die. Most people name themselves as the trustee in charge of managing their trust’s assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust’s assets if you ever become unable or unwilling to do so yourself. There are several types of trusts, states LA Probate Law and they can be amended or changed during the lifetime of the trustee. If you are planning an estate, this is a very important part of the process.
What a Living Trust Does
A living trust can be set up to benefit you while you are living and to assist in planning after your death. If there is no will in place at the time of your death, then it can help your estate planners after you have passed away. A living trust help ensure that your assets will be managed according to your wishes-even if you become unable to manage them yourself. In times of incapacity due to illness, disease or mental anguish, you can appoint someone to put through your wishes while you are unable to do so. In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. Some people like to names themselves as trustee to watch over their assets and property until they are no longer able to do so. It is possible, per LA Probate Law, that you can name a trustee to take over the trust’s management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee-similar to the executor of a will-would then gather your assets, pay any debts, claims and taxes, and distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval.
What happens if I am incapacitated?
If you are the trustee of your own living trust and you become incapacitated, your chosen successor trustee would manage the trust’s assets for you. If your assets were not in a living trust, however, someone else would have to manage them or someone that is appointed by the court. How this would be accomplished might depend on whether your assets were separate or community property. If you are married or in a registered domestic partnership, assets acquired by either you or your spouse or domestic partner while married or in the partnership and while a resident of certain states are community property. On the other hand, any property that you owned before your marriage or registration of your partnership, or that you received as a gift or inheritance during the marriage or partnership, would probably be your separate property. In some states, community property could be managed by your spouse or registered domestic partner if he or she is competent. If you own separate property (or are not married or in a registered domestic partnership) and you become incapacitated, such assets could be managed by an agent or attorney-in-fact under a power of attorney; without planning, however, your separate property assets would be subject to a probate court proceeding called a conservatorship. During the conservatorship process, a judge could determine that you were unable to manage your own finances or to resist fraud or undue influence. The court would then appoint someone (a conservator) to manage your assets for you says LA Probate Law, and the conservator would report back to the court on a regular basis. Your conservator might be someone whom you previously nominated. Or, if no one had been nominated, it might be your spouse, registered domestic partner or another family member. If none of those persons are available, then it might be the public guardian. These types of appointments are also public in nature and can be costly.
The assets held in your living trust can be managed by the designated trustee and distributed according to your directions without court supervision and involvement or the assistance of a lawyer. This can prove to be a significant savings to your heirs at the time of distribution. Since the trust does not need to be under management of probate court, you can designate your assets and the value and they would not be part of record. Your heirs and beneficiaries would still have to be notified about the living trust. If you are designating a trustee then you will want to provide this individual with a copy of the trust. In the event of your death, if you do not have a will in place, it is possible to have to place the assets with the probate court. Probate is a court-supervised process for transferring assets to the beneficiaries listed in one’s will. You will need a lawyer to petition the court in order to place the assets with the proper people. LA Probate Law states, then your will would be admitted to probate and an executor would be officially appointed. An inventory of your assets would be filed with the court and notice would be given to your creditors so they could file claims. The process would end once the court approved a final distribution of assets.