When you think of estate planning you are likely to think about executing a Last Will and Testament to ensure that your estate assets are distributed according to your wishes after you are gone. While planning for the distribution of your estate assets is certainly one important aspect of a comprehensive estate plan, it should not be the sole focus of an estate plan. On the contrary, a well-thought-out estate plan should include a variety of additional inter-related components, including an incapacity plan. The Los Angeles attorneys at Schomer Law Group, APC explain how to use a trust to plan for the possibility of incapacity.
Do I Need to Worry about Incapacity?
For those still in their youth, the notion of personal incapacity may not be a prominent consideration, often perceived as an issue primarily affecting the elderly. However, the risk of incapacity is a reality that transcends age, as it can result from unforeseen accidents or severe illnesses. Given the universal threat of incapacity, integrating an incapacity planning element into your estate plan is a prudent measure.
What Could Happen Without an Incapacity Plan?
To underscore the necessity of incapacity planning, envision a scenario where sudden incapacitation occurs due to a tragic accident or a serious workplace incident. Consider the following questions:
- Who will make healthcare decisions in your stead?
- Who assumes control of your assets and property?
- Who manages bill payments and oversees your finances?
- Who makes personal decisions, such as determining your place of residence?
Unless you have an incapacity plan in place, the answers to these questions remain uncertain. Even if you are married, there is no guarantee that your spouse will have the legal authority to take over all decision making for you nor have the legal authority necessary to take over your assets. All too often, what happens is that family members end up in a conflict over who will make decisions and take over control. That conflict sometimes ends up in a protracted and costly court battle that may create a permanent divide in the family. In the meantime, both you and your assets remain in limbo. The easy way to prevent all of this from occurring is to include an incapacity component in your comprehensive estate plan.
What Is a Revocable Trust?
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.
How Can a Revocable Trust Help with Incapacity Planning?
If incapacity planning is your goal, a revocable living trust can help. You start by appointing yourself as the Trustee and appointing 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. As long as 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.
Are You Ready to Create a Trust to Help with Incapacity Planning?
For more information, please join us for an upcoming FREE seminar. If you are ready to create a trust to help with incapacity planning, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.
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