Most people focus on the possibility of their own death when they set out to create an estate plan. While you certainly should plan for that possibility in your estate plan, your plan should also contemplate the very real possibility of your own incapacity. You may think of incapacity as something you need only worry about as you get older; however, the reality is that incapacity can strike at any time. With that in mind, a California living trust attorney explains how a living trust can be used as an excellent incapacity planning tool.
Do I Really Need to Worry about Incapacity at My Age?
The simple answer to that question is a resounding “yes.” 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.
Why Is Incapacity Planning So Crucial?
If you really stop to think about it, incapacity planning may be even 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 are 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 important 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 Does a Living Trust Fit into My Incapacity Plan?
One common incapacity planning tool is a revocable living trust that can be used to transfer control of your assets to someone of your choosing in the event of your incapacity. As the Trustor (creator) of the trust, you have the ability to 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. 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 are able to 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 on 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 a Riverside Estate Planning Attorney
If you have additional questions or concerns regarding the use of a living trust as an incapacity planning tool, or about incapacity planning in general, contact an experienced living trust attorney at Dennis M. Sandoval, A Professional Law Corporation by calling (951) 888-1460 to schedule an appointment or by clicking here.