A variety of estate planning tools and strategies will likely be incorporated into your estate plan as your assets, family, and estate grow. One of the most common additions to a comprehensive estate plan is a trust. If you do decide to add a trust to your estate plan, you will need to appoint a Trustee to oversee the administration of your trust. A Los Angeles trust attorney at Schomer Law Group, APC discuss appointing yourself as the Trustee of your own trust.
Trust Basics – Revocable vs. Irrevocable Trusts
Living trusts are divided into revocable and irrevocable living trusts. As the name implies, a revocable living trust is a trust that can be modified, revoked, or terminated by the Settlor. A Settlor can revoke the trust at any time and for any reason, or without providing a reason at all. Among other things, the Settlor of a revocable trust can modify the terms of the trust, replace the Trustee, or add and delete beneficiaries from the trust. Assets can also be added or removed from a revocable living trust rather easily. As a result, a revocable living trust is not a good choice if asset protection is your goal. The ease with which assets can be transferred into and out of a revocable living trust has a direct on how the law views those assets. When assets are held in an irrevocable living trust they are legally considered to be owned by the trust. Consequently, they are usually out of the reach of creditors, a bankruptcy trustee, or a spouse in a divorce. Assets held in a revocable living trust, however, are fair game because the Settlor can easily transfer them back into his/her name at any time. This distinction is important when discussing the ability to appoint yourself as the Trustee of a trust you create.
Appointing Yourself as Trustee
You can legally appoint yourself as the Trustee of any trust you create, whether it is a revocable or irrevocable trust. Appointing yourself as the Trustee of an irrevocable trust in which you are also the Settlor, however, would almost always defeat the purpose of making the trust irrevocable. Making a trust irrevocable protects the assets held by the trust. If you are the Trustee though, you continue to control those assets so the protection typically afforded assets held in an irrevocable living trust would disappear. On the other hand, appointing yourself as the Trustee of a revocable living trust is often advantageous to the goal. For instance, if incapacity planning is your goal, you need to appoint yourself as the Trustee as well as appoint someone you wish to take over control of your assets during your incapacity as the successor Trustee. Once the trust has been established you transfer all major assets into the trust. As long as you are capable, you control and manage those assets as the Trustee of the trust. If you become incapacitated, your designated successor Trustee takes over management of the trust assets until you can resume as the Trustee. Because the trust is a revocable trust, you are also able to modify the trust easily as well as move assets in and out of the trust with ease.
Contact a Los Angeles Trust Attorney
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about appointing yourself as the Trustee of your own trust, contact an experienced Los Angeles trust attorney at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.
- How to Keep Your Inheritance Separate and Secure - April 22, 2024
- Addressing Common Estate Planning Hurdles - April 17, 2024
- Estate Planning When Your Spouse Is a Non-Citizen - April 16, 2024
