Guardianship and Incapacity

Thinking about potential future health problems is hugely cheerful. However, the sad truth is that accidents do happen – this is why we all buy insurance of one form or another. It makes sense, therefore, to ensure that your intention regarding the treatment of your assets the event of your incapacitation is codified in a legal sense.

Guardianship Proceedings

Deciding upon a course of action for the management of an individual’s assets once they have been incapacitated can be both time-consuming and traumatic for all involved. In many cases, if an individual is incapable of dealing with their affairs themselves then they will also be incapable of explaining to others how they would like those affairs to be dealt with. This makes the process even more difficult. Living trusts can present an opportunity to avoid the necessity for difficult guardianship proceedings, and to ensure that the individual giving the instructions is safe in the knowledge that others are aware of their wishes.

Guardianship proceedings can be a long and difficult process. In the first instance, the individual in question must be deemed to be incapable of handling their own affairs by a court. Subsequently, the court will decide upon the most suitable individual to take charge of the affairs, and may give that individual direction regarding the manner in which these matters should be handled. During this already difficult time, tensions within families tend to be exacerbated, frequently resulting in conflict and arguments between family members.

Benefits of Using a Living Trust

The difficulties of this process can be avoided by the use of a living trust. This gives the settlor (that is, the individual establishing the trust) the opportunity to make clear, in a legal sense, who it is that they would like to manage their affairs in the event of incapacity. They can also give guidelines regarding the way in which their property should be dealt with.

When the living trust is established, the settlor will in most cases name themselves as trustee and beneficiary. However, they will also give details of a ‘successor trustee’; that is, an individual to whom the role of trustee will pass in the event of death or incapacity. This successor trustee will take on the management of the assets that have been placed in trust. The trustee can also provide specific instructions detailing the way in which they want these assets disbursed.

The most effective uses of a living trust in these circumstances occur when the settlor has transferred their assets into the trust before their incapacitation. As is detailed in other articles on this site, the settlor can continue to enjoy the benefits of these assets even when they are in trust. This is not a legal necessity, however. Rather, it is possible for the trust to be established but to remain un-funded, and for the settlor to provide power of attorney to the successor trustee, providing them with the power to transfer all of their assets into the trust and subsequently take charge of them.

The establishment of a living trust for this purpose must adhere to certain legal formulations. As such, it is important to seek independent advice before establishing such a trust.

Business Energy With a Difference

If you are looking for business energy or need advanced solutions like remote energy monitoring, new supplies, downgrading or upgrading capacity, have a no obligation chat with Purely Energy.

To find our more get in touch here. or call 0161 521 3400.