A comprehensive estate plan should do more than just provide a roadmap for the distribution of your estate assets when you die. In fact, your estate plan can help further a number of related goals and objectives. The additional components you incorporate into your estate plan will depend on your individual goals and objectives. Incapacity planning is one of the most common additions to a thorough estate plan. If you plan to incorporate incapacity planning into your estate plan you will likely need to decide between creating a power of attorney or a living trust. Only your South Carolina estate planning attorney can provide you with specific advice; however, you may wish to know why, in most cases, a living trust is better than a power of attorney.
The reason most people choose to create an incapacity plan is that they want to be the one to decide who will control their assets and who will make personal decisions for them in the event of their incapacity. Both a power of attorney and a living trust have the ability to act as an incapacity planning tool in that they both allow you to give someone else control over your assets.
A power of attorney allows you (the Principal) to appoint an Agent to whom you can grant the power to act on your behalf in legal matters. If you make the POA durable it will survive your incapacity. While this may work as an incapacity planning tool, a living trust usually is a better choice for a number of reasons, chief among them the fact that a power of attorney may not be honored by all third parties.
The way a living trust functions as an incapacity planning to is by allowing you to create a trust into which you transfer all major assets. You then appoint yourself as the Trustee and the person you wish to take over for you should you become incapacitated as the successor trustee. If you become incapacitated at any time, control over all trust assets shifts immediately to the successor trustee. The successor trustee then has the same power and control over the trust assets that you had prior to your incapacity. In addition, as the maker of the trust you have the ability to define “incapacity” which the terms of the trust, offering yet another level of control over the fate of your assets.
If you are concerned about incapacity planning, sit down with your estate planning attorney and decide which option is better for your plan. 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.