Who should be the trustee in a living trust? Since this type of trust is revocable, many individuals prefer to name themselves as trustee.
Of course, a primary advantage of trusts is that most can avoid probate, and any assets placed in the trust principal are not considered part of the decedent’s estate. In order for a living trust to utilize that advantage, a successor trustee should be named who can step into the role of trustee when the creator passes away. A living trust that includes this provision generally will become irrevocable upon the creator’s passing.
Another advantage of trusts is privacy. Whereas a probate proceeding is public, the trust documentation is not. The public can access most probate records, but generally not a trust document.
Of course, living trusts also share the flexibility of other trusts in imposing restrictions or limitations over distributions. If a creator wants beneficiaries to receive distributions according to a timetable, he or she can include that instruction in the trust instructions.
Many readers may not realize that a living trust can also fulfill the function of a power of attorney. If a creator becomes incapacitated, the co-trustee or successor trustee can take control and use the trust to manage the creator’s financial affairs and pay for medical costs. However, the trust must include wording that will allow for this contingency. An individual should also think carefully about naming the successor trustees. Children can be named in that role, but in the case of minor children or an anticipated family dispute, a professional fiduciary might be a better choice.
Source: State Bar of California, “Do I Need a Living Trust?”