ABA Family Legal Guide

The Rights of Older Americans

A Right to Control Your Own Affairs

Living Trusts

How may I use a living trust to plan for possible incapacity?

You may design a living trust so it takes effect only if you become incapacitated. In this way, you keep control over your affairs until the proper person determines that you are incapacitated. As with a durable power of attorney, the process for such a determination should be spelled out in the document.

You also may write your living trust so that it is effective before you become incapacitated and continues even after you lose capacity. For example, you might name yourself as trustee and manage the trust's assets while you have capacity, but name a successor trustee who will take over for you if you become incapacitated. Again, you should designate in the trust document how that determination of incapacity should be made.

To make the trust effective, you must transfer money or property into the trust. The trust will only control the assets and property that have actually been transferred into the trust.