Like many people, you may equate the concept of estate planning with creating a plan for the distribution of your estate assets after your death to ensure that loved ones are provided for in when you are gone. This is certainly understandable as that is one of the primary functions of the average estate plan. When you think about protecting and providing for your loved ones, however, your death is not the only reason to have a plan in place. The possibility of your own incapacity is an equally important motivation. Although your incapacity plan will be just as unique as your overall estate plan, the Vero Beach living trust lawyers at Kulas Law Group explain how a living trust can help with incapacity planning.
Why Is Incapacity Planning So Important When I Am Still Young?
People view the possibility of incapacity as a problem that only affects the elderly. While it is true that your odds of becoming incapacitated will increase with age, incapacity can strike at any time and to anyone. Consider the following facts and figures:
- Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire.
- Over 37 million Americans are classified as disabled; about 12% of the total population. More than 50% of those disabled Americans are in their working years, from 18-64
- An otherwise healthy 35-year-old female has a 24% chance of becoming disabled for 3 months or longer during her working career.
- An otherwise healthy 35-year-old male has a 21% chance of becoming disabled for 3 months or longer during his working career.
- The average length of disability for that 35-year-old female or male is 82 months.
What Is a Trust?
At its most basic, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. A testamentary trust is one that activates upon the death of the Settlor via a provision in the Settlor’s Last Will and Testament in most cases. A living trust activates as soon as all formalities of creation are in place.
How Can a Living Trust Help Me Plan for Incapacity?
A revocable living trust is a popular incapacity planning tool because it offers a quick and easy way to transfer control over your assets to the person of your choice in the event incapacity ever does strike. As Settlor of the trust, you name yourself as the Trustee and create the trust terms. You also name the individual you wish to take over control of your assets in the event of your incapacity as the Successor Trustee. You then transfer major assets into the trust. In the event of your incapacity, the person you named as the Successor Trustee will take over your role as Trustee automatically. By doing so, he or she will also gain control over your most important estate assets. Because you are the Settlor of trust, and have the ability to create the trust terms, you are even able to define “incapacity” any way you like and/or include steps to be required in order to establish your incapacity. Moreover, because you are using a revocable living trust, it is very easy to add or remove assets from the trust, change the name of the Successor Trustee, or even terminate the trust if you decide it is no longer needed. Finally, as an added benefit your revocable living trust can also be a useful probate avoidance tool as well.
Contact Vero Beach Living Trust Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the use of a revocable living trust as an incapacity planning tool, or you wish to get started on your living trust, contact the experienced Vero Beach living trust lawyers at Kulas Law Group by calling (772) 398-0720 to schedule an appointment.