Friday, July 28, 2017

One Major Advantage of Having a Living Trust

October 20, 2009 by  
Filed under Estate Planning

One often overlooked advantage of having a Living Trust is incapacity planning.  As you get older or your parents age, there is a greater risk of not being able to handle your own affairs because of physical or mental health issues.  Additionally, there is always the risk of becoming injured in an accident and not being able to take care of yourself.

With a bit of pre-planning and preventive law, you can avoid the expensive and time-consuming court options that are available after the fact, like conservatorships and guardianships.  These proceedings are court-supervised proceedings which names an individual or entity to manage the affairs of an incapacitated person.  It is an expensive process requiring attorney-expertise and hearings with the court.  A properly drafted living trust can avoid this proceeding for a fraction of the cost.

Recently, I received a phone call from a young man who was worried that his father, a very intelligent, retired architect, was starting to show signs of dementia.  While his father was not completely incapacitated, he would have moments of forgetfulness and irrationality that impeded the handling of his own affairs.  His son was worried that a woman friend was taking advantage of his father by having his father withdraw cash from his accounts and credit cards to give to her.  Sometimes, this would happen several times a day and sometimes the father would forget that he did it.  The son wanted to know what he could do to stop this from happening.

At this point, a Conservatorship was the only solution available.  This could have been avoided if the father had a properly funded living trust in place that named the son as successor trustee in the event of the father’s incapacity.  Then, all of his father’s assets would be held in trust and only accessible and controllable by the son.  His father’s friend could not get to the money through the father because the son would be trustee.  However, this option was no longer available because his father no longer had capacity to have these documents drafted and to understand what they meant.

Today’s preventive law tip: Don’t wait until it’s too late to get your estate planning done.  Capacity is a  very necessary requirement.  For more advantages of having a living trust, click here.

Comments

One Response to “One Major Advantage of Having a Living Trust”
  1. At last, some info on trust planning. Much needed!

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!