Living Trusts

Many people do not realize the power and flexibility of a revocable living trust. This is an extremely useful estate planning tool for managing assets both before and after the death of the grantor, the person who sets up the living trust. Establishing a mechanism that allows all assets to automatically flow into the trust upon the grantor’s death makes it possible to avoid probate. The grantor can control the assets within the trust or appoint someone else to do so. Since the trust is revocable, the grantor can change or cancel the trust if needed.

A well-drawn living trust safeguards property if the grantor becomes incapacitated, avoiding guardianship issues and the associated costs. The trust also offers more protection and control than a power of attorney. In short, a Living Trust has two primary and powerful functions:

  • Avoiding Probate proceedings
  • Avoiding Adult Guardianship proceedings (for an family elder who has become mentally incompetent due to Alzheimer’s or a stroke, for example)

Nonetheless, a Living Trust can have other valuable functions such as:

  • Trusts for your minor (or young adult) children if you are deceased
  • Divorce, Estate Tax or Medicaid protection for a surviving spouse
  • Divorce, bankruptcy and creditor protection for children or grandchildren

The results are far-reaching and extraordinarily beneficial for your family.

Irrevocable trusts and special needs trusts are also extremely beneficial. Discuss the differing benefits with an experienced Estate Planning Attorney.

  • A Financial Power of Attorney allows someone to designate an agent to handle their financial affairs if they become incapacitated.
  • A Health Care Power of Attorney names an agent to handle health care decisions if they cannot do so themselves.
  • Living Wills allow people to state what they wish done in an end-of-life situation.

Establishing Guardianship and a Special Needs Trust for an Individual with a Disability

Individuals tasked with the care of a child or adult with disabilities need to ensure this person will be cared for after their passing. If assets are to be left for the person with the disability, Special Needs Trusts must be established. This type of trust functions to ensure the disabled party’s ability to obtain government benefits, such as Medicaid and Supplemental Security Income, is not jeopardized. The problem is many assets won’t affect eligibility, yet others will, including any cash the person has in the bank. For this reason, individuals with a Special Needs Guardianship need to start the process to develop this trust early.

When a person suffers from a disability, they may not be able to make decisions for themselves. The guardian is tasked with making decisions on their behalf, and the process of requesting guardianship should be started before the individual turns 18 to ensure everything is in place when they hit this milestone. Guardianship for children with disabilities is typically granted to the parents, as parents normally serve as guardians for their children. Guardianship for adults with disabilities involves having the court decide who will be given this position if this hasn’t already been established. Many individuals choose to name a guardian via a durable power of attorney and a will that is duly probated, especially those who know they have a high probability of becoming disabled at some point in the future.

Guardians must meet state qualifications, and he or she cannot be incapacitated. In addition, the guardian needs to understand that they can only take on those tasks the disabled person cannot do for themselves. The powers of the guardian vary greatly, but may include making financial or medical decisions on behalf of their ward and submitting updates regarding the ward’s condition to a court. Before determining if a person needs a guardian, however, their level of independence needs to be evaluated and alternatives to guardianship considered. Furthermore, a court needs to rule on the disabled person’s capacity to care for themselves. Once a guardian has been named, a special needs trust should be set up to ensure they receive the necessary care.

The Special Needs Trust holds any assets that could affect a person’s ability to obtain government benefits. The trust holds these assets, and it is overseen by a trustee. The trustee doesn’t supply the disabled party with money but can use the assets in the trust to buy items and services needed for the disabled person. This may include personal care attendants, home furnishings, any medical and dental expenses that must be paid out of pocket, and more. An attorney can be of assistance in establishing a guardianship and a trust of this type, regardless of the person’s age, and ensure that the funds are spent as intended. Contact an attorney today to begin the process to ensure the loved one is cared for under any circumstances.


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