A well thought out and drafted estate plan should do much more than simply create a roadmap for the disposition of your estate assets when you die. Only you, with the assistance of your Missouri estate planning attorney, can decide what additional components are right for your needs and objectives; however, there are some commonly included additions, including incapacity planning. One estate planning tool that is frequently used to accomplish incapacity planning within an overall estate plan is a living trust. If you plan to incorporate incapacity planning into your estate plan (a wise idea!) it may be helpful to have a better understanding of why a living trust is often used, and how it is used, for incapacity planning purposes.
When most people here the term “incapacity” they immediately envision an elderly individual suffering from Alzheimer’s or another age related dementia disease. While Alzheimer’s disease certainly can cause a sufferer to become incapacitated, the reality is that incapacity can strike anyone, at any time. A catastrophic workplace accident, a life-threatening illness, or a tragic car accident can all lead to incapacity in the prime of your life. In fact, statistically speaking you stand a one in five chance of suffering a period of incapacity during your working years. Take a moment to stop and consider what would happen if you were suddenly to become incapacitated tomorrow and ask yourself the following questions:
- Who would take care of your home and other property?
- Who would make financial decisions on your behalf?
- Who would make medical treatment decisions for you?
The answer to all of those questions remains unknown unless you have an incapacity plan in place. Without a plan, your loved ones could end up in a protracted, and costly, court battle over the right to make decisions for you and/or manage your assets while you are incapacitated. By including incapacity planning in your comprehensive estate plan you have the ability to make those decisions yourself, thereby assuring yourself that the person you choose will be in control should you become incapacitated at any time in the future.
With the need for incapacity planning clearer, the next question focuses on how a living trust can help with your plan. Trusts are broadly divided into two categories – testamentary and living trusts. A testamentary trust is one that does not take effect until your death. A living trust, as the name implies, takes effect as soon as all of the elements of creation are in place and assets are transferred in to fund the trust. Living trusts are further subdivided into revocable and irrevocable living trusts. A revocable living trust is one that can be changed or revoked by the Maker of the trust at any time and for any reason whereas an irrevocable living trust cannot be changed by the Maker for any reason. For incapacity planning purposes a revocable living trust is used. And works as follows:
If you have additional questions or concerns about incapacity planning, or any other estate planning issues, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
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