As your estate plan grows and expands, you will incorporate a variety of estate planning tools and strategies into that plan. One of the most common of those is a trust. If you do decide to add a trust to your estate plan, you will need to appoint a Trustee for that trust. A Bellevue trust attorney at Legacy Estate Planning, LLC discusses appointing yourself as the Trustee of your own trust.
What Is a Trust?
A trust is a legal relationship that allows one party to hold assets for the benefit of a third-party. Trusts are broadly divided into two categories: testamentary and living trusts. Living trusts are further divided into revocable and irrevocable living trusts. As the name implies, a revocable living trust is a trust that can be modified, revoked, or terminated by the Settlor. A Settlor can revoke the trust at any time and for any reason, or without providing a reason at all. Among other things, the Settlor of a revocable trust can modify the terms of the trust, replace the Trustee, or add and delete beneficiaries from the trust. Assets can also be added or removed from a revocable living trust rather easily. Conversely, when a trust is irrevocable, it cannot be modified or terminated by the Settlor, meaning assets cannot be added or removed.
The ease with which assets can be transferred into and out of a revocable living trust has a direct impact on how the law views those assets. When assets are held in an irrevocable living trust they are legally considered to be owned by the trust. Consequently, they are usually out of the reach of creditors, a bankruptcy trustee, or a spouse in a divorce. Assets held in a revocable living trust, however, are fair game because the Settlor can easily transfer them back into his/her name at any time. This distinction is important when discussing the ability to appoint yourself as the Trustee of a trust you create.
Appointing Yourself as the Trustee of Your Own Trust
Legally, you can appoint yourself as the Trustee of any trust you create, whether it is a revocable or irrevocable trust. Appointing yourself as the Trustee of an irrevocable trust in which you are also the Settlor, however, would almost always defeat the purpose of making the trust irrevocable. Making a trust irrevocable protects the assets held by the trust. If you are the Trustee though, you continue to control those assets so the protection typically afforded assets held in an irrevocable living trust would disappear.
On the other hand, appointing yourself as the Trustee of a revocable living trust is often advantageous to the goal. For instance, if incapacity planning is your goal, you need to appoint yourself as the Trustee as well as appoint someone you wish to take over control of your assets during your incapacity as the successor Trustee. Once the trust has been established you transfer all major assets into the trust. While you are capable, you control and manage those assets as the Trustee of the trust. If you become incapacitated, your designated successor Trustee takes over management of the trust assets until you can resume as the Trustee. Because the trust is a revocable trust, you are also able to modify the trust easily as well as move assets in and out of the trust with ease.
Contact Bellevue Trust Attorneys
If you have additional questions or concerns regarding creating a trust or appointing a Trustee, contact the experienced Bellevue trust attorneys at Legacy Estate Planning, LLC by calling (425) 455-6788 to schedule an appointment.