A complete estate plan involves more than just planning for what will happen after you die, but also protects you in the event of your incapacitation. In many situations, a plan that includes a revocable living trust can offer special benefits in ensuring that the person you want to manage your assets is free to do so in the manner you would want. A living trust, working together with your financial power of attorney, can give you the protection you need if you were to become incapacitated.
With your favorite football team, each player has a specific job. For example, in pass protection, interior linemen protect against rushers coming up the middle, tackles might block edge-rushing defensive ends and a running back might be tasked with picking up a blitzing safety. Your estate planning team is like that, where each member has a specific role suited to that person's expertise and qualifications. Your estate plan documents also can work together as a team to protect you, such as the event of your incapacitation.
If you desire a plan that will help you plan for the possibility of your becoming incapacitated, an estate plan that includes a will, powers of attorney and a revocable living trust may be very beneficial. Some people believe that the only planning you need to protect against incapacity is a power of attorney for financial matters, but this is not always true.
Certainly, a power of attorney for financial matters is an essential component of a complete plan, and serves a vital role if you become incapacitated. Certain assets, like your Social Security income or some retirement accounts, cannot (or should not) be funded into a revocable living trust. Additionally, you may have some assets that you forgot to fund into your trust before your incapacitation occurred. Your power of attorney offers necessary benefits in that it authorizes your agent to continue to manage those assets even after you've become incapacitated.
With many other assets, however, it is worthwhile to utilize the advantages of a revocable living trust. A carefully drafted trust may be able to give your trustee greater flexibility and discretion in how he/she manages the assets in your trust than an agent would have under the authority of a revocable living trust. Many banks and other financial entities may balk at accepting a power of attorney and allowing your agent to act under the powers assigned by that document. A person acting as the successor trustee of a revocable trust may encounter fewer roadblocks to exercising the authority you want him/her to have.
Your power of attorney provides many essential and unique benefits, including possibly protecting your family from needing to go to court and seek the appointment of a guardian or conservator. However, a living trust can also offer many vital advantages when it comes to incapacity planning. Through careful planning and working with reliable estate planning professionals, you can be sure that, when you cannot speak for yourself, your plan can be your voice.