How does your trust help you while you’re alive? Many people think of trusts as death planning instruments–the type of thing that only operates upon your death.
But trusts have a critically important role to play while you are alive in the event you lose capacity. People are living longer and the likelihood of being physically able, but mentally unfit is growing.
Without a trust plan in place, a person and his money cannot be easily cared for. In fact, a court supervised conservatorship is required to manage the person and estate of people who lose mental capacity, but have no other safeguards in place for the management of their money and personal care.
Unfortunately, conservatorships are costly, time consuming and expose everything (and I mean everything) to ongoing court supervision. In other words, your life becomes an open book and the court decides who will make decisions for you and then tries to oversee those decisions as best it can….yikes!
Since a conservatorship takes place in court, it provides a ready forum for lawsuits. It’s not uncommon for a person’s children to fight over who should be named as the conservator. And those types of lawsuits can be nasty business.
But a well planned trust can avoid all of that because under the trust terms, you appoint a successor to manage your money if you ever become incapacitated. You should also have a Health Care Directive in place so that you can name someone to make your medical decisions. With these two documents properly prepared, your personal care and your assets can be quietly and easily managed until you return to full mental capacity.
So the next time someone tells you that a trust isn’t necessary because it only takes effect after you’re dead and gone, think again. That trust may save you a lot of time, money and public scrutiny while you’re still alive.