Who will make decisions about what you own if you become incapacitated? A Living Trust, known as a Revocable Living Trust, details how you want your estate managed, and who you want to manage it, under several different circumstances--while you are living, while you are alive but unable to handle your own affairs and after death.
A Living Trust is a legal compilation of assets, part of an estate plan, put together by a Trustmaker. That Trustmaker is you. Initially, you make all the personal and asset decisions for the beneficiary of the Living Trust. In other words, as long as you are alive and well, you are your own Trustee and beneficiary.
Choosing A Successor Trustee
If you are seriously ill or injured and become incapable of taking care of your own affairs, a Trustee of your choosing takes control of the trust to manage your assets in the way you would do it yourself, if you could. Should you die, a Trustee deals with debts, final expenses and beneficiary distribution.
With so much at stake, it's critical to appoint the right Trustee. An estate planner can help guide you, but it really comes down to your own choice. Would a bank or legal firm be better able to manage your property or would you want someone closer to you to be your Trustee? In some cases, more than one Trustee is designated.
The first consideration is to take stock of your assets and assess what complexities may surround them. The more you own or owe, the more arduous decisions can be for a designated Trustee. Making a bank or legal firm your Trustee may be the objective answer, if your estate is large or you have the possibility of family conflict.
Choosing Family or Friends
If you feel that impersonal strangers, even advisors, have no real understanding of your wishes, then hiring an outside Trustee may not be right for you. Your other option would be to assign the work of Trustee to someone you know, either a relative or a friend; however, choose cautiously.
Trustee work is usually long-term and intricate. The person chosen to represent your best financial interests, when you cannot, must be more than trustworthy, loyal and willing to do the job; they must be capable enough to act in your place and qualified enough to see your wishes through to your complete satisfaction.
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