Revocable Living Trust and Dementia.

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  #1  
Old 09-04-2021, 01:07 PM
Manolo2 Manolo2 is offline
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Default Revocable Living Trust and Dementia.

Some advisory articles recommend using a revocable living trust to help protect from elder financial abuse in the event that one becomes mentally (or physically) incompetent. Especially in the scenario where one is a widow with no children and no other living relatives. I am researching whether a trust could help me BEFORE I die. (My goal is different than most people who use trusts for probate avoidance and other issues AFTER death.) Any advice on using a trust for this purpose? Any thoughts about designating a “corporate trustee” (i.e., a trust company) rather than a family member as trustee? Any local trust company recommendations?
  #2  
Old 09-04-2021, 02:25 PM
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Originally Posted by Manolo2 View Post
Some advisory articles recommend using a revocable living trust to help protect from elder financial abuse in the event that one becomes mentally (or physically) incompetent. Especially in the scenario where one is a widow with no children and no other living relatives. I am researching whether a trust could help me BEFORE I die. (My goal is different than most people who use trusts for probate avoidance and other issues AFTER death.) Any advice on using a trust for this purpose? Any thoughts about designating a “corporate trustee” (i.e., a trust company) rather than a family member as trustee? Any local trust company recommendations?
Call Attorney Amy Pittman for a consultation. 352-399-6944.
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  #3  
Old 09-04-2021, 04:28 PM
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I agree with Amy Pittman recommendation.
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Old 09-04-2021, 05:01 PM
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A power of attorney might be your answer. I do not see any benefit to a revocable living trust since you can do what ever you want with the assets. A trust that would become irrevocable when you could not manage your assets and using a large professional trustee could be a good idea.

Last edited by rjm1cc; 09-05-2021 at 03:35 PM.
  #5  
Old 09-04-2021, 05:45 PM
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Please consult a reputable attorney specializing in such matters. I have used a RLT for over twenty years. It contains a provision that if I am cognitively incapacitated the trustee will run the show as no one in my immediate family is capable of doing so. If my incapacity is temporary I can be restored to managing things with a physician's consent. That provision gives me peace of mind.

RLTs have many advantages, especially reducing probate expenses and hassles. In simple modest estates it can be a do it yourself project although I do not recommend it. What Is a Revocable Living Trust and Why Make One? | Nolo
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Old 09-04-2021, 09:50 PM
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Posts #2 and #3 recommended the same attorney. Both of the gentlemen doing the recommending are credible posters here. If I were you, I would start by making an appointment to consult with the attorney they both suggested, have your questions ready, and see what you think.

Last edited by Boomer; 09-04-2021 at 10:01 PM.
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Old 09-05-2021, 06:26 AM
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You didn't say specifically what your concern is with "elder financial abuse", but I believe that is what a financial power of attorney is for. With no living relatives, you could appoint a trusted friend to such a position. If you, like myself, have no one you feel comfortable appointing, there are professional fiduciaries that can do the job. Just make sure they are with a reputable company or have appropriate licensing/bonding/certification. An estate planner can help find the appropriate person. Such fiduciaries can also take on the job of estate executor.

As far as using a trust, I assume you'll be leaving your assets mostly to charity so probate will not be an issue, nor would it be likely to have anyone challenge your Will. Thus the two main reasons for having a Trust disappear. And finding a trusted successor Trustee comes with the same challenges as finding a financial power of attorney. I've set up a donor advised fund (easy to do with Schwab or Fidelity), which has a legacy feature as well. You can simply maintain your own personal funds then bequeath them to the DAF as a beneficiary when you die.
  #8  
Old 09-05-2021, 06:35 AM
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Originally Posted by manaboutown View Post
Please consult a reputable attorney specializing in such matters. I have used a RLT for over twenty years. It contains a provision that if I am cognitively incapacitated the trustee will run the show as no one in my immediate family is capable of doing so. If my incapacity is temporary I can be restored to managing things with a physician's consent. That provision gives me peace of mind.

RLTs have many advantages, especially reducing probate expenses and hassles. In simple modest estates it can be a do it yourself project although I do not recommend it. What Is a Revocable Living Trust and Why Make One? | Nolo
Manaboutown: Thanks for the discussion. I'm researching this and going down my own path as far as I can to make the legal encounter as efficient as possible (most estate lawyers charge by the hour). The link within your referenced link that discusses the DIY possibility does not work. Any updates or references that you found useful?

Some clarifications: I have found the the "Revocable Trust" document usually does not address incapacity. That is done with a "Durable Power of Attorney" document and to a lesser extent by a "Health Care Surrogate" document (non life threaening health care decisions) or ultimately through a "Living Will" document ("plug pulling" or DNR instructions). The Trust package usually includes all those documents as well as a "HIPAA Release" for authorizing medical records release and a "Pourover Will" to address assets that are not titled in the trust.

You raise an interesting point about restoring your decision making powers. Never thought about it. It may be a standard provision within the Power of attorney.

Further clarification: You imply that you have "used" RLTs for a long time. I believe you meant that you have set up the trust and placed assets in it. The actual decision making is still yours with the same SS number. So the way I see it, the RLT really does nothing for you while you're alive: no asset protection, no tax benefits, etc. It DOES set things up to make it easier and more private as you transcend to fly your cloud.

When you pass, the revocable trust now becomes irrevocable and your "successor trustee" (that person is usually named within the trust document) calls the shots and hopefully will follow your instructions. The assets that are in the trust are not subject to probate, since the trust already owns them. Also, regardless of who held power of attorney while you were still alive, the POA terminates upon death and the successor trustee takes over.

Manolo2 (OP): It sounds like you are concerned about your assets being diverted against your wishes. Merely setting up a RLT will not address that, since that trust is changeable (hence the name "revocable). So if someone exerts undue influence on you while you are alive, but short of incapacitated, it would not accomplish your goals. If you cede decision making authority to the Power of Attorney holder while you're alive, that could accomplish your goals. If that POA were a corporate entity, it would probably have even more force, but corporate trustees are not positioned to take on the POA responsibility. They step in as "successor trustees" after your death.

An extreme alternative would be to set up an "Irrevocable Trust" or simply gift the asssets while you're still alive, but you would also lose control.

Also, corporate trustees normally don't get paid to manage your assets until after you pass, another reason why they most probably would not be involved in protecting your assets while alive.

Once you pass, an RLT would accomplish your goals. So would a will. So my feeling is that a RLT has many advantages (no probate, ease of transition, privacy, continuity after you die, etc ), but it will not help with elder abuse any more than a will.

PS Some strong laws have been passed recently in Florida to address elder abuse, but I gather the purpose of your post is to try to avoid legal hassles after your'e gone.

Last edited by gpk111; 09-05-2021 at 06:53 AM.
  #9  
Old 09-05-2021, 06:37 AM
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Quote:
Originally Posted by Manolo2 View Post
Some advisory articles recommend using a revocable living trust to help protect from elder financial abuse in the event that one becomes mentally (or physically) incompetent. Especially in the scenario where one is a widow with no children and no other living relatives. I am researching whether a trust could help me BEFORE I die. (My goal is different than most people who use trusts for probate avoidance and other issues AFTER death.) Any advice on using a trust for this purpose? Any thoughts about designating a “corporate trustee” (i.e., a trust company) rather than a family member as trustee? Any local trust company recommendations?
Go see Amy Pittman or one of her attorneys. They are excellent and will give you good advice!
  #10  
Old 09-05-2021, 06:53 AM
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Quote:
Originally Posted by rjm1cc View Post
A power of attorney might be your answer. I do not see any benefit to a revocable living trust since you can do what ever you want with the assets. A trust that would become irrevocable when you could not manage your assets and using a large professional trustee could be a good idea. What is the objective of the trust?
I have power of attorney for both parents. I prefer to have a family member make decisions over a stranger, lawyer or banker. But everyone have different needs. I did get attorney advice.
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Old 09-05-2021, 09:39 AM
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We used Pitman Law Office too. Very pleased at how knowledgeable they were.
  #12  
Old 09-05-2021, 09:59 AM
gpk111 gpk111 is offline
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Originally Posted by manaboutown View Post
Please consult a reputable attorney specializing in such matters. I have used a RLT for over twenty years. It contains a provision that if I am cognitively incapacitated the trustee will run the show as no one in my immediate family is capable of doing so. If my incapacity is temporary I can be restored to managing things with a physician's consent. That provision gives me peace of mind.

RLTs have many advantages, especially reducing probate expenses and hassles. In simple modest estates it can be a do it yourself project although I do not recommend it. What Is a Revocable Living Trust and Why Make One? | Nolo
Did you use a corporate trustee? If so, would you mind sharing who?

Last edited by gpk111; 09-05-2021 at 10:22 AM.
  #13  
Old 09-05-2021, 10:06 AM
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Originally Posted by rjm1cc View Post
A power of attorney might be your answer. I do not see any benefit to a revocable living trust since you can do what ever you want with the assets. A trust that would become irrevocable when you could not manage your assets and using a large professional trustee could be a good idea. What is the objective of the trust?
You’re exactly correct ! Thank you for clearly stating such
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Old 09-05-2021, 10:09 AM
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Originally Posted by Boomer View Post
Posts #2 and #3 recommended the same attorney. Both of the gentlemen doing the recommending are credible posters here. If I were you, I would start by making an appointment to consult with the attorney they both suggested, have your questions ready, and see what you think.
If she’s professional she would offer a free consultation. Research as much as you can and find a library with Florida law. Sad there is no decent library which the residents deserve.
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Old 09-05-2021, 10:12 AM
KRMACK55 KRMACK55 is offline
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Quote:
Originally Posted by MrLonzo View Post
You didn't say specifically what your concern is with "elder financial abuse", but I believe that is what a financial power of attorney is for. With no living relatives, you could appoint a trusted friend to such a position. If you, like myself, have no one you feel comfortable appointing, there are professional fiduciaries that can do the job. Just make sure they are with a reputable company or have appropriate licensing/bonding/certification. An estate planner can help find the appropriate person. Such fiduciaries can also take on the job of estate executor.

As far as using a trust, I assume you'll be leaving your assets mostly to charity so probate will not be an issue, nor would it be likely to have anyone challenge your Will. Thus the two main reasons for having a Trust disappear. And finding a trusted successor Trustee comes with the same challenges as finding a financial power of attorney. I've set up a donor advised fund (easy to do with Schwab or Fidelity), which has a legacy feature as well. You can simply maintain your own personal funds then bequeath them to the DAF as a beneficiary when you die.
Avoid retail investors like Schwab and Fidelity with lots of fees embedded in these estates.

An attorney who only does estate planning should be both an accountant tax attorney with a speciality in trusts. They also can give a price for preparing everything including DNR and other measures.
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