The importance of planning for incapacity

On Behalf of | Aug 17, 2021 | Estate Planning

It’s not uncommon for Missouri residents to focus their estate planning efforts on what happens after they die. However, an estate plan can also help you account for events that might take place during your lifetime. A trust, Financial Power of Attorney or Health Care Directive are all estate planning documents that can all be used to give you greater say as to how your affairs are managed when you are no longer able to physically speak for yourself.

A trust takes effect as soon as it’s created

Trust assets can be placed in the control of a family member, a close friend or a colleague if you become incapacitated. This person will then be able to manage, sell or transfer those assets per your instructions as contained within the documents.

A financial agent can also manage your property while you’re incapacitated

A person who is designated as your financial agent, under a Financial Durable Power of Attorney, may be able to sell property, pay bills or file tax returns while you’re incapacitated. It’s worth noting that you can authorize this person to manage your finances even if you are not incapacitated. This may be a good idea if you frequently travel for business, have a low level of fiscal literacy or simply want to spend your time doing other things.

The difference between a living will and a Last Will and Testament and a Revocable Living Trust

The term “Living Will” is really a misnomer.  “Living and “Will” do not go together! The actual applicable term is “Health Care Directive with Durable Power of Attorney for Health.”   It’s the Health Care Directive that allows individuals to specify the level of medical care that they would like to receive while incapacitated.

A Last Will and Testament allows you to dictate who receives your assets after you pass, and it can also be used to appoint a guardian for a minor child.

Many people do not understand that the transfer of ownership under a Last Will and Testament mandates that the transfer of ownership is through court action of the Probate Court.  All Wills are subject to Probate!

If you are over the age of 18, state law generally allows you to create a will, trust or other estate planning documents. In addition to creating these documents, it may be a good idea to have regular conversations with family members about your plan’s goals. This may make it easier for them to take timely and appropriate actions if you become incapacitated.

Our goal is to effect the management or transfer of ownership without involving the Probate procedure.