Are you the trustee of your living trust? You may be wondering what will happen if there comes a time when you become incapacitated, the successor you have chosen would manage your trust for you. Unless, of course, you did not move your assets to the living trust; if that is the case, another individual would be the one to manage the trust. Some of the factors that might affect your trust could depend on whether or not your assets were considered community property or separate property, as well as if you have a durable financial power of attorney.
Will My Spouse Control the Estate?
Remember that if you were married, the assets that you have accumulated during the marriage might be grouped under the category of community property. Your possessions that were given to you or inherited to you before you were married are considered separate property. In our state, community property transactions are handled by the spouse if you become incapacitated. Separate property, on the other hand, may be managed by an outside agent or someone acting as “attorney-in-fact,” otherwise known as durable power of attorney.
In every case, if you do not have an estate plan in place or have another plan set aside for handling these matters, your estate could end in probate court, in a conservatorship proceeding, which may or not be disadvantageous, depending on the particular circumstances.
What Is a Conservatorship?
A judge will appoint an individual or a group to provide care for an adult who has become incapacitated. The judge makes the determination that the individual has become incapacitated to the degree that they can no longer oversee their financial matters. The decision will be made to appoint a conservator to manage those assets. A conservator can be someone whom you have personally handpicked. It may also be a spouse, domestic partner, or a member of your family. Otherwise, the courts may choose a public guardian.
A conservatorship should be used to protect those who become incapacitated and can no make the critical decisions regarding their assets. They can be very complex and time-consuming court proceedings, considering how much time is invested in having the courts decide on matters. Not to mention the fact that they are highly public. They tend not to allow for much room to decide on matters such as real estate, as opposed to a living trust such as revocable living trust, where you can continuously modify the terms to suit your needs.
Conservatorship proceedings are designed to help protect you at a time when you are vulnerable or incapable of managing your assets. However, they are also public in nature and can be costly because of the substantial court intervention. Also, conservatorship proceedings may be less flexible in managing real estate or other interests than a well-managed living trust.
As always, feel free to reach out to our Folsom estate planning attorney to discuss any matter concerning conservatorship, planning your estate, probate, and living trusts. We have over 20 years of legal experience. Contact us today to request your free consultation.