Getting older isn't always easy — and neither is talking about what happens if you become unable to manage your own affairs. But planning for incapacity before it's needed is one of the most important things you can do for yourself and your family.
Many people cover this ground with documents like a Durable Power of Attorney or a Living Will. But there's one document that can accomplish all of this at once: the living trust.
Why a Living Trust Works
A living trust (also called a revocable trust) is one of the most versatile estate planning tools available, for two big reasons:
- It avoids probate. Assets held in a trust pass directly to your beneficiaries after death, bypassing the probate process and keeping transactions private.
- It protects your beneficiaries. Trusts can include additional clauses — such as spendthrift or staggered distribution provisions — that help safeguard how and when beneficiaries receive assets.
The Incapacity Planning Advantage
Beyond estate planning, a living trust doubles as a powerful incapacity planning tool.
Many standard documents still require the account owner's signature to take effect — which becomes a problem if you're incapacitated and unable to sign. A living trust solves this by naming a contingent trustee in advance, who can step in immediately to manage the trust's accounts, pay bills, and handle your affairs without delay.
The process is simple: once the trust is in effect, the contingent trustee only needs to present the trust certificate to the bank or brokerage to take over the accounts — no court involvement, no waiting.
The Trade-Off
The main downside is cost — trusts are more expensive to draft than a simple will or power of attorney. But for many families, the long-term savings in time, privacy, and avoided probate fees can outweigh the upfront expense.
Next Steps
If you're thinking through your estate and incapacity plans, it's worth talking to an attorney about whether a living trust fits your needs. If you'd like help reviewing your estate plan, give us a call.
OneAscent Financial Services, LLC (“OAFS”), d/b/a The Cornerstone Financial Group, is a registered investment adviser with the United States Securities and Exchange Commission. OAFS does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by OAFS or any unaffiliated third party. OAFS is neither an attorney nor accountant, and no portion of the presented content should be interpreted as legal, accounting, or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.