Competent means having the mental capacity to make and understand decisions regrading your property. A person can become legally incompetent if declared so in a court proceeding. If a person tries to make or revoke or amend a living trust and someone challenges her mental capacity, or competence. to do so, the matter can end up in a nasty court battle. Fortunately, such court disputes are quite rare.

The key to a living trust established to avoid probate is that the grantor (remember, that’s you, the person who sets up the trust) isn’t locked into anything. You can revise, amend or revoke the trust for any (or no) reason, any time before your death, as long as you’re legally competent. And because you appoint yourself as the initial trustee, you can control and use the property as you see fit.
And now for the legal magic of the living trust device. Although a living trust is really only a legal fiction during your life, it assumes a very real presence for a brief period after your death. When you die, the living trust can no longer be revoked or altered. It is now irrevocable. The trust really does own the property now.
With a trust for a single person, after you die, the person you named in your trust document to be successor trustee takes over. He or she is in charge of transferring the trust property to the family, friends or charities you named as your trust beneficiaries.
With a trust for a married couple, the surviving spouse manages the trust. A successor trustee takes over after both spouses die, or become incapacitated.
There is no court or governmental supervision to insure that your successor trustee complies with the terms of your living trust, That means that a vital element of an effective living trust is having someone you fully trust be your successor trustee. If there is no person you trust sufficiently to name as successor trustee, a living trust probably isn’t for you. You can name a bank, trust company or other financial institution as successor trustee, but that has serious drawbacks.