Living Trusts Provide Protection For Your Potential Incapacity

Revocable Living Trusts serve several important functions in estate planning.  I have already discussed how a Living Trust can be a powerful tool to help an estate avoid probate court (saving time, money and anguish) and how they can provide divorce protection for your children.

Another way a living trust can protect you is in the event you are no longer physically or mentally capable of handling your own affairs.  What are the chances this will happen?  Nobody knows.  Life brings unexpected changes (i.e., car accidents, diseases and other crises).  But if we take time to plan for these potential events, you can save the inevitable stress and problems that accompany declaring someone legally incapacitated. 

Don’t Do Nothing

There are serious consequences that arrise from having made no arrangements from such a situation.  If you own property in your name and you become incapacitated a Court will set up a conservatorship in the state of California.  The Conservator will be named by the Court, not by you.  Many Conservators draw a fee for their services from your estate.  Family members might vie for this position, possibly creating discord against them. 

Any contact that the Court appointed Conservator has with the Court creates additional expenses, which further siphons away your financial resources.  Conservators must file annual accountings and reports with the Court, requiring even more additional expenses.  Judicial proceedings are also generally a matter of public record and your family might be forced to air it’s public laundry publicly.

Living Trusts Save Money

Extra legal fees can be avoided if you create a Living Trust  naming someone specifically to assure the role of Successor Trustee in the event of incapacity.  Through a Living Trust you avoid having a Court appointed Conservator oversee your assets, stop the unnecessary depletion of your estate by legal fees and decide how much to compensate your Successor Trustee.

Create Power of Attorney Documents

 

When drafing a Living Trust, I advise my clients to also create a Durable Financial Power of Attorney and a Healthcare Power of Attorney.  The same person can be selected by you to hold all three positions, or you can choose different people to hold each power.  Court appointed Conservators do not have the broader powers of administation that are granted by law to Successor Trustees.  By planning ahead, you can name a trusted person to handle your affairs and be assured that your wishes will be carried out and your best interests protected.  A Living Trust allows the Successor Trustee to assume the administration of the trust when you become incapacitated, avoiding a costly Conservatorship a lot of family distress. 

I hope this article has helped you.  If you have a specific concern, please contact our office (909)981-6177.

One Response to “Living Trusts Provide Protection For Your Potential Incapacity”

  1. Lakeisha Lavista Says:

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