Living Trusts

A good method of preserving/protecting assets is through a revocable living trust--see chapters 11 and 12. You name yourself and someone you trust as co-trustees (or name the other person as your alternative trustee). You transfer the assets that need managing (especially things like investments, rental property, and bank accounts) to the trust. You can give the co-trustee/alternative trustee the powers over the assets you want (you can, for example, require that until you are incapacitated he or she must obtain your approval before taking any action). If you become incapacitated, your co-trustee/alternative trustee will manage the assets for you. If you die, the assets can pass into your estate, continue in the trust, or be paid to a beneficiary. However, a living trust may not be appropriate for your situation. They can be cumbersome in that they entail transferring assets into the trust while you’re alive.