When you think about estate planning you probably focus on what will happen to you and your assets after your death. While your estate plan certainly should plan for your eventual death, your plan should also contemplate the very real possibility of your own incapacity. Incapacity planning should be included in every adult’s estate plan. With that in mind, the Los Angeles estate planning attorneys at Schomer Law Group, APC discuss how a living trust can be used for incapacity planning.
Do I Really Need to Worry about Incapacity at My Age?
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.
Given the odds of becoming incapacitated at some point, incapacity planning is arguably more important than planning for your eventual death. After all, once you are gone you won’t need the assets you accumulated during your lifetime; however, the hope and belief is that a period of incapacity won’t last forever. When that incapacity ends, you will have to live with the decisions made by others during your incapacity. With that in mind, it should matter to you who controls your assets while you are incapacitated. Of even more importance is who will make decisions relating to your health care if you are unable to make them yourself. If you do not make these decisions yourself prior to your own incapacity, a judge may be forced to make them for you. Worse still, your family and loved ones may end up in a contentious and divisive court battle over the right to control your assets and/or make health care decisions for you. The only way to avoid that possibility is to include incapacity planning in your comprehensive estate plan.
How Can a Living Trust Help with Incapacity Planning?
One common incapacity planning tool is a revocable living trust than can be used to transfer control of your assets to someone of your choosing in the event of your incapacity. As the Settlor (creator) of the trust you can appoint yourself as the Trustee of the trust and appoint 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. While 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. You can even create your own definition of “incapacity” or create your own qualification for determining that you are incapacitated. Finally, you can also include instructions for how to distribute the trust assets after your death if you wish to do so, making the trust a dual-purpose estate planning tool.
Contact Los Angeles Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to use a living trust to plan for the possibility of incapacity, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APC by calling (310) 337-7696 to schedule an appointment.