When you contemplate the need for estate planning, you probably think in terms of planning for the distribution of estate assets after your death. Creating a roadmap which can be used to pass down your assets is certainly an important part of estate planning; however, a well thought out and comprehensive estate plan should accomplish much more than just deciding how your assets will be distributed. One important addition to a comprehensive estate plan is incapacity planning. The Lincolnshire living trust lawyers at Hedeker Law, Ltd. explain how incapacity planning fits into your estate plan.
You Don’t Have to Be a Senior to Worry about Incapacity
All too often, when people think about the possibility of becoming incapacitated they immediately associate that possibility with old age. While the natural aging process itself, helped along by conditions such as Alzheimer’s disease, can result in incapacity, you don’t have to be a senior to end up incapacitated. On the contrary, incapacity can strike anyone at any age as a result of a workplace injury, a serious illness, or even a car crash. To help you understand the need to plan for the possibility of your own incapacity, consider the following facts and figures:
- Just over 1 in 4 of today’s 20 year-olds will become disabled before they retire
- In December of 2012, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits.
- A typical 35-year-old has a 24% chance of becoming disabled for 3 months or longer during his/her working career.
- Moreover, that same worker has a 38% chance that the disability would last 5 years or longer, with the average disability for someone like him/her lasting 82 months
- Stroke is a leading cause of long-term disability
- 34% of people hospitalized in 2009 for stroke were younger than 65 years of age
If You Become Incapacitated, What Happens to You and Your Assets?
The real question is what will happen to you and your estate if incapacity does strike? Do not make assumptions such as your spouse will handle everything. In some cases your spouse may have the legal authority to take control and/or make decisions; however, even a spouse may not have authority to take care of everything during your period of incapacity. If you are not married, the question becomes even more important. If you fail to plan ahead by choosing for yourself who will be granted decision-making authority and who will take control of your estate, a judge may end up deciding for you – but not before a divisive and costly legal battle if more than one friend or family member wants the right to make decisions and/or control your estate.
Planning Ahead – Creating a Living Trust
The only way to know with certainty who will be in charge of making decisions for you and/or controlling your assets in the event of your incapacity is to incorporate incapacity planning into your overall estate plan now. One of the most popular incapacity planning tools is a revocable living trust. Creating a revocable living trust allows you decide ahead of time who will control your estate assets in the event of your incapacity. It works by allowing you to appoint yourself as the Trustee of the trust and appoint someone of your choosing as the successor Trustee. Your estate assets are then transferred into the trust. Because you are the Trustee, you continue to control those assets just as before; however, if you become incapacitated the successor Trustee (chosen by you) takes over as Trustee, thereby shifting control of your assets to the person of your choice without the need for court intervention. Moreover, when you recover you can resume your position as Trustee as if nothing happened. Finally, because the trust is revocable, you can move assets in and out of the trust with ease and even replace the successor Trustee if you wish to do so at any time.
Contact Lincolnshire Living Trust Lawyers
Please plan to join us for one of our FREE estate planning seminars. If you have questions or concerns regarding incapacity planning or creating a living trust, contact the experienced living trust lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.