Effective business management often involves appointing “backup” personnel to ensure smooth operations in unforeseen circumstances. Similarly, prudent financial planning entails preparing for potential disruptions that may arise due to prolonged illness or other unexpected events.

One approach to addressing this concern is granting a trusted individual or family member legal authority to act on your behalf when necessary. However, entrusting such critical responsibilities to someone inexperienced may pose risks. This is where a “living trust” with a professional trustee can offer a more secure alternative, seamlessly stepping in to manage your finances if needed.

Standby Protection

A living trust operates on a straightforward premise. Initially, you transfer assets into the trust, designating yourself as the trustee. Additionally, you appoint a reliable and seasoned successor trustee. Under normal circumstances, you retain control over your finances. However, if specified circumstances, such as illness or extended absence, prevent you from managing your affairs, the successor trustee assumes control of the trust assets for the required duration.

Beyond Backup: Additional Benefits

Establishing a living trust provides not only backup support but also flexibility. You retain full control over your assets during your lifetime, with the freedom to make adjustments as needed. Whether it involves modifying trustee responsibilities, amending trust provisions, or even revoking the trust altogether, you maintain autonomy over your financial arrangements.

Moreover, a living trust offers asset protection for your family posthumously, ensuring professional management of assets and bypassing probate proceedings. This streamlined process facilitates quicker, more cost-effective estate settlements, benefiting your beneficiaries and preserving the privacy of trust terms, unlike public probate proceedings.

Long-Term Planning and Trial Period

Ultimately, a living trust empowers you to dictate the long-term fate of your wealth, distributing assets according to your wishes and specified conditions. Additionally, during your lifetime, entrusting your trustee with asset management enables you to evaluate their performance and suitability for the role, providing a practical trial period to ensure satisfaction with your chosen arrangements.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.