Is a Revocable Trust Irrevocable Upon Incompetence?
A revocable trust is a flexible part of an estate plan, allowing you to avoid probate, plan for future incapacity, and remain in control of your assets while you are alive and of sound mind. Generally, a revocable trust becomes irrevocable upon the death or mental incompetence of the person who establishes it.
Other People Are Reading
-
Revocable Trust
-
When you establish a trust, you are known as the grantor. A grantor often initially also serves as trustee and primary beneficiary of his trust. As grantor, you sign a document called a trust declaration that names a successor trustee in the event of your incapacity or death. This document also names beneficiaries who will inherit your property when you die. After establishing your trust, you transfer the desired property to your trustee. The trustee in charge of the trust at any given point is in control of the property and must manage it according to the instructions in the trust declaration. You retain authority to change the terms of the trust declaration or to revoke the trust while you are alive -- as long as you have the mental capacity to take such actions.
Incompetence
-
If you become mentally incompetent to make your own decisions due to an injury or an illness, your successor trustee will step in and manage the assets you have transferred into your trust. The terms of your trust define what qualifies as mental incompetence. Many trusts require the opinions of either one or two doctors. Since mental incompetence means you lack the legal capacity to take certain actions on your own behalf, such as creating and revoking a trust, it generally renders your trust irrevocable. When a trust is irrevocable, it cannot be changed or canceled by you as grantor.
-
Successor Trustee
-
While you are deemed mentally incompetent, your successor trustee’s primary job will be to ensure you are provided for in the manner directed by your trust declaration. He has a fiduciary duty to manage the trust for the benefit of you and your beneficiaries, rather than for his own benefit.
Regained Competence
-
Mental incompetence is not always a permanent condition. If you recover from an illness or injury and regain competence to act on your own behalf, your trust once again becomes revocable. You then have the option to resume the role of trustee or to allow your successor trustee to continue to act on your behalf.
Considerations
-
Estate planning laws differ by state, and the rules governing trusts can be complicated. Consult an attorney for individual estate planning advice.
-
