By Elizabeth A. Caruso, Esq.
In the next few months of Elder Law Myth Busters, I am going to focus on reasons why you may want to have a trust. This month’s focus will be on disability planning from an individual perspective. Trusts can help with planning for your own disability and for planning for family members who may have disabilities. We will tackle family members who may have disabilities next month.
With regard to trusts helping if you as the trust creator become disabled, I really mean if you become incapacitated. When you create a revocable trust you typically name a successor trustee. This is someone you trust to manage your trust if you cannot manage it yourself. It is easy to imagine this successor trustee stepping in if you pass away, but what happens if you lose capacity? Trust can have what is called a “disability panel,” which is a group of people that you trust to act in your best interest who can make the call that you may not have the cognitive ability to manage your own trust at some point. If the disability panel makes this determination, pursuant to the trust rules, then your successor trustee can begin to manage the trust and perform any duties that you could have performed as the initial trustee.
The successor trustee setup can be easier to utilize for the management of assets when someone loses capacity than can a power of attorney. Please don’t get me wrong, powers of attorney are very important documents, but financial institutions are leery of them. With all of the fraud that is going on today in the banking world, it is understandable that banks have a hesitancy when people want to utilize a power of attorney. Additionally, if you are using a power of attorney to buy or sell real estate, you must record the original power of attorney with the Registry of Deeds. If you only have one original power of attorney, that may spark an issue, or worse yet, what if you cannot find the original and only have a copy? In that case, you are out of luck and need to apply for a conservatorship with the probate court in order to buy or sell the real estate. None of these issues arise with a successor trustee acting on behalf of a trust.
An elder law attorney can help you to create a trust that is set up with a successor trustee and a disability panel to ensure the continuity of your trust should you lose capacity. If you already have a revocable trust and you don’t know if it contains these aspects, an elder law attorney can review it and advise you.
About the Author: Elizabeth A. Caruso, Esq. is an attorney at Legacy Legal Planning, LLC, in Norwell. She has been practicing estate planning, probate, and elder law on the South Shore for more than a decade. If this article has sparked questions for you, please feel free to reach out via phone 781-971-5900 or email elizabeth@legacylegalplanning.com to schedule a time to discuss your unique situation.
