Technical article

If I Lose My Memory or Die, Who Runs the Trust, and Who Changes the Investments?

A revocable trust usually defines incapacity in its own words.

By Neil Solomon · 3 min read

Imagine a widower in the United States with a revocable trust and two grown children. One lives nearby and one lives abroad. Over a few years his memory slips, and the family wonders who is in charge of the money. This is an example, not a real family.

The question under it is a practical one. What happens to the money, and who may change the investments?

How the handover usually works

A revocable trust usually defines incapacity in its own words. Often it asks for a doctor's letter, and sometimes for two. The successor trustee then shows the letters to the banks and takes over. This is how a California law firm describes the practice. It adds that incapacity turns on evidence of impaired mental function, not on a diagnosis. A doctor requirement adds protection, and it can delay action.

Once the successor takes over, the job has a plain description. A vendor of online trust documents says the successor must manage the investments to preserve value, "if not increasing" it, and keep detailed records. Those records support the yearly account the trustee owes to the beneficiaries. The trustee is also expected to keep the beneficiaries informed.

Who changes the investments

State laws answer that. By default the trustee holds that power. In South Dakota the trustee must invest as a prudent investor and spread the money around, unless the deed says to keep a certain asset. Delaware lets the deed vary those duties.

A deed can name an investment adviser instead. These are called directed trusts. Under them, a trustee in South Dakota, Nevada, Alaska or Delaware is relieved of liability for following the adviser, and Delaware keeps liability only for wilful misconduct. Where a trustee hires an agent, over 45 states use a rule that frees the trustee from blame for the agent's decisions, if the agent was picked, instructed and checked with reasonable care.

Later changes to the deed itself are another matter. About 42 states had decanting laws by September 2025. Decanting lets a trustee move assets to a new trust with different terms. Courts, written agreements and protector clauses are other routes.

Contests

Trust contests are often brought on two grounds, lack of capacity and undue influence. The same law-firm article advises beneficiaries to ask questions if unexpected people take control.

Who this touches

You are the person the clause protects. Your partner and your children are the ones who live with the result. A child abroad may be the one asked to send a doctor's letter, or to read the yearly account from a distance.

The objection

You might say your family would sort it out without a clause. Many families do. The clause matters when the family is tired, or divided, or when a bank asks for paper. A doctor's letter adds protection, and it can also delay action, so the wording is worth choosing in advance.

A few doors

You could read your deed for the words that define incapacity. You could ask who names the investment adviser, if there is one, and who may replace the trustee.

Have you written down who changes the investments if you are unable to? Tell us what you chose. Share it here, and someone may benefit from your story.

Figures are estimates for planning, based on public data. Date read: October 2026.