When you think about the need for estate planning, you likely envision a plan that will protect and provide for loved ones in the event of your death. Your eventual death, however, should not be the only focus of your estate plan. The possibility of your incapacity should also be covered in your comprehensive estate plan. While there are a number of estate planning tools and strategies that can be used to plan for incapacity, a living trust is one of the most popular of those tools. The attorneys at Nash, Nash, Bean & Ford, LLP explain how a living trust can help you with incapacity planning.
Why Is Incapacity Planning So Important?
People often equate incapacity with Alzheimer’s or other forms of age related dementia. While dementia certainly does lead to incapacity, you do not have to be a senior nor suffering from dementia to be incapacitated. On the contrary, incapacity can strike at any age and can be the result of a wide variety of causes. A tragic motor vehicle accident or a debilitating illness, for example, could result in your incapacity while you are relatively young. In fact, you stand about a one in five chance of suffering a period of incapacity lasting five months or more during your working years. If you do become incapacitated, who will control your assets and investments? Who will pay your bills? Who will make medical and personal decisions for you? Without an incapacity plan in place, the answers to these questions are unknown and may be decided by a judge.
How Can a Living Trust Help Me?
One of the biggest concerns during a period of incapacity is what will happen to your assets and investments. Naturally, you want someone of your choosing to have the legal authority to take over control of those assets. For that to happen, however, you must plan ahead. A revocable living trust can help.
A revocable living trust is a trust that activates as soon as the formalities of creation are all in place. Because it is revocable, the Settlor (you) may modify, amend, or terminate the trust at any time. When used as an incapacity planning tool, you will appoint yourself as the Trustee of the trust. You will also appoint the individual of your choosing to be the successor Trustee. As the Trustee, you will control all trust assets and will have the ability to transfer assets into and out of the trust as needed. You will also create the trust terms. You may even wish to include specific terms that help determine what qualifies as “incapacity.”
If you do become incapacitated, your chosen successor Trustee will automatically take over your spot as the Trustee of the trust. He or she will then gain control of all trust assets without the need for court approval or any additional steps. If you eventually regain the capacity to administer the trust, the successor Trustee will step back down to the successor Trustee position and you will again become the Trustee. Using a revocable living trust allows you to determine, ahead of time, who will take over control of your assets in the event of your incapacity. It also provides a very simple method by which that individual can take over that control, thereby eliminating the possibility of protracted and divisive litigation involving family members who disagree about who should exert control over your estate.
If you have questions or concerns regarding living trusts and/or incapacity planning in the State of Illinois, contact the experienced living trust attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.