Ideally, your estate plan should accomplish numerous inter-related goals that go beyond simply planning for the disposition of your estate assets after you are gone. For example, a comprehensive estate plan should also protect you, and your assets, in the event of incapacity while you are alive. The living trust lawyers at Augulis Law Firm explain why a living trust often makes an ideal incapacity planning tool.
I’m Too Young to Worry about Incapacity
This is a common, yet mistaken, belief. While it is true that age-related dementia caused by conditions such as Alzheimer’s certainly can cause incapacity, you could also suffer a period of incapacity at any age. A tragic car accident, a debilitating illness, or even a work-related injury could all result in your incapacity. In fact, a typical 35-year-old has a 24 percent, or one in four, chance of becoming disabled for 3 months or longer during his/her working career. That same worker has a 38 percent chance that if disabled, that disability will last for five years or longer. When you add to that the fact that one on three seniors is suffering from Alzheimer’s or another age-related dementia at the time of their death, the need to include an incapacity planning component in your overall estate plan should become clear.
What Would Happen If You Were Incapacitated Tomorrow?
The best way to understand the need for incapacity planning is to take minute and consider what might happen if you were incapacitated tomorrow as a result of a serious accident. Can you answer the following questions?
- Who would make healthcare decisions for you?
- Who would make personal decisions, such as where you will live, for you?
- Who would take over control of your finances and pay your bills?
- Who would manage your assets and property while you are unable to do so?
Without an incapacity plan in place, the answer to each of those questions remains unclear. In a worst case scenario, your family members might end up in a protracted legal battle over the right to make decisions for you and/or manage your assets. Not only would this costs a small fortune but it could create a rift in your family that might never mend. The way to avoid this is to make your wishes known now and create the legal framework by which those wishes must be implemented in the event you ever do suffer a period of incapacity.
A Revocable Living Trust Can Help
A revocable living trust is a very popular incapacity planning tool for several reasons. As the Settlor of the trust, you create the trust and name yourself as the Trustee. You then name the person you would want to take over control of your assets in the event of your incapacity as the successor Trustee. Assets are then transferred into the trust. As the Trustee, you continue to have access to, and control over, those assets just as you did before creating the trust. If, however, you become incapacitated, your successor Trustee takes over as the Trustee automatically. As the Trustee of the trust, your chosen successor now has control of the trust assets without the need to involve a court or do anything else. Because it is a revocable trust, you also have the ability to move assets in and out of the trust as needed and to replace the successor Trustee with someone else if the need arises. In addition, as the Settlor of the trust, you even have the ability to use the trust terms to define “incapacity” or to set up procedures to be followed to determine under what conditions the successor Trustee should take over as Trustee.
Contact Warren Township Living Trust Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about using a revocable living trust for incapacity planning, contact the experienced living trust lawyers at Augulis Law Firm by calling 908-222-8803 to schedule your appointment today.
- What Is the Best Way to Plan for Incapacity? - September 17, 2021
- What Is an ILIT? - September 14, 2021
- Estate Planning for the Beginner - September 3, 2021
