Estate planning, when done properly, should accomplish a wide range of inter-related goals. While the distribution of your estate assets at the end of your life will remain part of your estate plan, additional goals should be included as well to create a comprehensive estate plan. Protecting the assets that you acquire over the course of your lifetime, for example, should be a primary goal so that you have something left to pass down to your loved ones after you are gone. The asset protection attorneys at Hedeker Law, Ltd., explain why incapacity planning can help you protect your assets.
The Need for Comprehensive Estate Planning
When you think about estate planning you probably focus on the desire to ensure that your assets are passed down to your loved ones according to your wishes after you are gone. Creating a roadmap for the distribution of your estate assets is certainly an important part of any estate plan; however, a comprehensive estate plan can – and should – do much more. Throughout your life, there will be a number of threats to the assets you accumulate. Unless your estate plan also includes strategies to prevent the loss of your assets, you may not have anything left to pass down at the end of your life. Some of the threats to your assets are well known, such as divorce, bankruptcy, or taxes; however, there are other threats that you may not have considered, such as the possibility of your own incapacity.
Incapacity Isn’t Just for the Elderly
Like many people, you may think of the risk of incapacity as something you only need to worry about when you reach your retirement years. Although the natural aging process does increase the likelihood that you will become physically and/or mentally incapacitated, you are hardly safe from the possibility prior to that time. In fact, your risk of suffering a period of incapacity prior to reaching retirement age is likely much higher than you realize. One in five people suffers a period of disability that lasts five months or longer during their working years (prior to reaching age 65). A tragic car accident, a debilitating illness, or a workplace injury could all lead to your incapacity. If that does happen, what happens to your assets while you are unable to manage them?
Components of an Incapacity Plan
Think of your incapacity plan as a type of insurance. You hope you will never need it, but if you do need it you will be very glad you have it. Imagine, for a moment, what might happen without an incapacity plan if you were seriously injured in a car accident tomorrow. If those injuries prevented you from managing your assets, who would do so for you? If you are married, your spouse would be the likely choice; however, even your spouse may not have the legal authority necessary to step in and take over control of your assets and finances unless you planned ahead and made sure that he/she has the proper authority. If you are not married, a close family member might be willing to take over in your absence, but would certainly not have the legal authority required to do so. Moreover, if more than one person wants to take over for you, a bitter and divisive legal battle could ensue that might create a rift in the family for many years to come. To prevent this, include incapacity planning in your overall estate plan. Your incapacity plan might include a power of attorney, a revocable living trust, and/or an advance directive, all of which allow you to designate someone now who will step in for your later if the need arises.
Contact Asset Protection Attorneys
Please feel free to download our FREE estate planning worksheet. If you have questions or concerns regarding asset protection or incapacity planning in Illinois, contact the experienced asset protection attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.