Like most people you would likely prefer not to think about the possibility of becoming incapacitated at some point in your life. Unfortunately, however, incapacity can strike anyone at any time. While incapacity can be the result of an old age dementia disease such as Alzheimer’s, it can also be caused by a tragic collision or catastrophic workplace accident. If you do suddenly become incapacitated, who will manage your assets? Are there alternatives for managing property when a person becomes incapacitated? How should you plan for the possibility of incapacity?
Incapacity planning should be part of any comprehensive estate plan. Managing property when a person is incapacitated can become a serious problem in the absence of a plan. If you own property as a sole owner no one will have the authority to do anything with that property should you become incapacitated absent a court order unless you planned for the possibility. Moreover, your basic estate plan will be of no help because your Last Will and Testament and other accompanying documents only become effective upon your death, not your incapacity.
A power of attorney is one option for managing property in the event of incapacity. For a power of attorney to work should the Principal (you) become incapacitated, however, the POA needs to be a durable POA. A “durable” POA is simply a POA that survives the incapacity of the Principal. A POA gives your Agent the authority to act on your behalf in legal matters. A POA can be limited in scope or general.
Another popular incapacity planning tool is a revocable living trust. A revocable living trust allows you to create a trust and appoint yourself as the Trustee of the trust. You then appoint a spouse or other loved one as the successor Trustee. Property is then transferred into the trust, allowing you to manage it while you are able to do so. Should you become incapacitated, management of the trust will automatically pass to the successor Trustee, allowing him or her to manage the property without the need to seek a court order. Moreover, using a revocable living trust allows you to make changes to the trust or even revoke the trust at any time and for any reason.
If you have additional questions or concerns about incapacity planning or estate planning in general, contact the experienced South Carolina estate planning attorneys at Kuhn & Kuhn Law Firm by calling 843-577-3700 to schedule your appointment.