If you are the trustee of your own living trust and you become incapacitated, your chosen successor trustee would manage the trust’s assets for you. If your assets were not in a living trust, however, someone else would have to manage them. How this would be accomplished might depend on whether your assets were separate or community property, and whether you have a durable financial power of attorney. (Even if you have executed a living trust, it is still recommended that you execute a durable financial power of attorney. See #12.)
If you are married or in a registered domestic partnership, assets acquired by either you or your spouse or domestic partner while married or in the partnership and while a resident of California are community property. (Note: In domestic partnerships, earned income is not treated as community property for income tax purposes.)
On the other hand, any property that you owned before your marriage or registration of your partnership, or that you received as a gift or inheritance during the marriage or partnership, and the earnings or appreciation associated with such property, would probably be your separate property.
In California, most transactions concerning community property could be managed by your spouse or registered domestic partner if he or she is competent. If you own separate property (or are not married or in a registered domestic partnership) and you become incapacitated, such assets could be managed by an agent or attorney-in-fact under a durable power of attorney (See #12). Without planning, however, some or all of your financial matters would be subject to a probate court proceeding, generally called a conservatorship.
During the conservatorship process, a judge could determine that you were unable to manage your own finances or to resist fraud or undue influence. The court would then appoint someone (a conservator) to manage your assets for you. And the conservator would report back to the court on a regular basis.
Your conservator might be someone whom you previously nominated, or, if no one had been nominated, it might be your spouse, registered domestic partner or another family member. If none of those persons are available, then it might be the public guardian.
Conservatorship proceedings are designed to help protect you at a time when you are vulnerable or incapable of managing your assets. However, they are also public in nature and can be costly because of the substantial court intervention. In addition, conservatorship proceedings may be less flexible in managing real estate or other interests than a well-managed living trust.