One universal human trait is the need for control of one’s own life. This striving for control becomes apparent early in babies and it ceases only when the person no longer has the mental capacity to recognize and understand his or her environment. This trait is especially strong in the United States where children are brought up to believe that they can do anything if they work hard enough. In short, the American Dream is the striving for control of one’s life and the ability to actually achieve that dream.
For many seniors, they have achieved their dream through years of hard work. They are retired from the work force and they can use their time as they wish. They have accumulated assets and they enjoy the satisfaction of being able to use those assets as they wish. Unfortunately, at they very time when seniors can most enjoy control over their lives, they also need to be facing the sad reality that it probably will not last for the duration of their lives. Strokes, Alzheimers, and many other illnesses and disabilities can rob seniors of the ability to make good decisions. In other words, the senior becomes incompetent. This means that another, either a person serving as power of attorney for the senior or a conservator must make decisions.
Overall, this can be a good thing when loving family members or trusted friends serve in these roles. However, it can be a terrible thing when the individuals now in control abuse their role and take the seniors assets for their own. It is also often very difficult to prove because the senior may have given the person such broad powers that it cannot be shown that the person stole the assets.
A solution is a Standby Trust. The trust is created while the senior is in control of his or her assets. The senior creates very specific instructions for how the senior’s assets are to be used in the trust. A nominal sum of money is placed in the trust to begin it. No additional monies are added to the trust until the senior does become incapacitated. At that time, the senior’s assets are placed in the trust and the trustee, most likely a close family member or friend, must strictly follow the rules the senior set out in the trust. In other words, this trust will allow the senior to control his or her remaining life by his or her own terms and conditions. Forseniors who simply do not want to give up any control; or, for those that want to be sure their close family and friends do not take advantage of the senior, this type of trust is a very effective.
Another way of accomplishing the same objective is to have a revocable living trust. The senior is the trustee of this trust and can use the assets in the trust in the same manner as if they were solely in the possession of the senior. However, the trust has provisions that state if the senior becomes incapacitated another person will assume the role of trustee and will manage the senior’s assets according to the terms of the trust which typically provide for the needs of the senior first; and, possibly others if the senior so desires. The revocable living trust also serves in place of a last will and testament if the senior has placed all of his or her assets in the trust.
As with many issues in estate planning, there are often several ways to handle a matter depending on the desires and wishes of the person. A senior worried about his or her assets in the event of capacity has a number of options to explore when discussing the topic with a lawyer.
Editor’s Note: Melanie B. Bradford is an attorney located in Scottsboro, Alabama at 803 Garland Ferry Road at the intersection of Veterans Drive and Garland Ferry near The Daily Sentinel. Her phone number is 256-259-3301. The Alabama State Bar requires any communication that may be interpreted as an ad to state: “No representation is made about the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”