Jun 19, 2013

How a Revocable Living Trust help you avoid Guardianship or Conservatorship

What is Guardianship?

A guardianship is when in the absence of legal documents such as a Revocable Living Trust, living will, or power of attorney the court appoints a person to make the housing, financial, and medical decisions for an individual who has been deemed to be unable to make decisions for themselves.

What is Conservatorship?

A conservatorship is when the court appoints a person to handle the financial and estate matters of a person who can no longer make these important decision for themselves.

The difference between Guardianship and Conservatorship?

Many jurisdictions use the words synonymously but generally Guardianship is the legal term which applies to a child whose parents are unable to care for them and a Conservatorship is the term most used when an adult is no longer able to make decisions.

How can a Revocable Living Trust help?

One of the most efficient ways to avoid Guardianship or Conservatorship is to create and fund a Revocable Living Trust. In a Revocable Living Trust the Trustor (Creator of the Trust), Trustee (Person who manages the Trust), and Beneficiary many times are the same person. In the event that the Trustor becomes incapacitated the appointed disability Trustee steps in and handles the medical, financial, and estate matters of the incapacitated individual. A Trust which contains both a living will and power of attorney avoid a court appointed conservatorship to make health care and financial decisions respectively. A valid Durable Power of Attorney can cover assets which cannot be funded into Trusts such as IRAs. In addition to avoiding a long, expensive, and painful legal process of Guardianship a Revocable Living Trust which contains provisions on how assets are to be managed by the disability Trustee allow for an individual to retain control on how their affairs are being managed even in the event that they become incapacitated.