From our “Ask a Question” mailbag: I have been diagnosed with the early stages of Alzheimer’s and need to create a way to have my son assist me as the disease progresses. Can a Revocable Living Trust help my son assist me with my diminished capacity and against any creditors that may arise in the future?
You are wise to start planning now to address your Alzheimer’s. Most people put off this planning, and that rarely ends well.
Creating a Revocable Living Trust that names both you and your son as co-trustees, each able to act independently, is a good system to help prepare for the future. This system allows you to manage your assets alone now, but as things become more difficult for you, your son will have the ability to seamlessly start taking over the management of your assets. Banks like this system, as it avoids the complications of using a Power of Attorney.
Though a Revocable Living Trust is a wonderful tool to help you with your Alzheimer’s, it will do nothing to help avoid your creditors. Because you can take the assets back and they are available for your use, creditors are able to access the assets in a Revocable Living Trust.
If you create an Irrevocable Trust and fund it before the creditor has a claim, it can be designed so that that creditor has no way to access the funds. But this would require you to give up ownership, control and the future use of the assets.
It is possible that a combination of Revocable and Irrevocable Trust might be a good alternative for you, but I would need to know more about your assets and your overall estate planning goals in order to say so. Feel free to contact me to set up a free consultation.
If you have any other questions about Estate Planning, Revocable Living Trusts or Irrevocable Trusts, feel free to contact our office for a free consultation.