A living trust allows you to hedge against an adverse event in the future, such as becoming incapacitated due to an illness or accident. Living trusts have advantages that allow you to move assets in and out at your will, and give you full control over the assets you place inside. They also allow you to name yourself as the trustee, or the person who is authorized to exercise control over the assets. In order to provide further protection, you can name a spouse, child or other designated individual as a joint trustee while you are living, or as the successor trustee in the event of your passing.
In the event that your family relationships are contentious and will fight for your assets after your passing, you can protect them and your heirs with a living trust. A challenge to a trust is usually based along the lines of you were under undue influence or not mentally competent, or your signature on the document was forged. It is difficult to mount a successful legal challenge to your trust due to the fact that you are considered to be in sound mind and body at the time of its formation. This is proven by your moving assets in and out of the trust while you were competent, and demonstrates that you were of sound mind when you took these actions.
Living trusts also allow a successor trustee to manage your affairs in the event you become incapacitated and a doctor verifies the condition. The successor has a duty to manage the trust on your behalf, and must file an annual income tax return. In the event of your passing, your successor distributes the assets in the trust according to directions you laid out in the trust document.
For help with estate planning, wills and probate, contact Gaudy Law in Upland to speak with a lawyer today.