Personal Backup with a Living Trust
The managers of well-run businesses usually name “backups” to keep things going smoothly — just in case. That’s also a smart plan for your personal finances, where you risk experiencing financial losses or other difficulties if you can’t make your own decisions because of a long illness or other unexpected problem.
You might prepare for this possibility by giving a family member or another trusted individual the legal power to act for you if necessary.
Here’s how a living trust could potentially work. You initially transfer assets into the trust, naming yourself as the trustee. You also name a reliable, experienced trustee as the successor trustee. At that time, you simply continue managing your finances as usual, until the circumstances that you’ve specified in your trust agreement happen. Then, the successor trustee will take over management of the trust assets for as long as necessary.
You maintain control of your assets during your lifetime and are free to make changes anytime. For example, you could give your trustee more or less responsibility, amend the trust’s provisions, or even cancel the trust entirely.
Your trust can protect your family after your death by keeping your assets under a professional investment manager’s uninterrupted care. And living trust assets don’t pass through probate. That can make the settlement of your estate easier, faster, and often much less costly.
Your family or other beneficiaries will receive the trust’s assets on the schedule you’ve arranged and under the conditions you’ve specified.
If your trustee manages the trust assets during your lifetime, you’ll be able to decide whether you’re satisfied with the arrangements you’ve made — and with the quality and reliability of the trustee’s services.
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