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How the risk of disability affects every estate plan
We all know that none of us are getting out of this thing alive. We do not know when our time will come. However, along the way, the chance that you or a family member will acquire a disability by ac- cident or illness is very high. And this can have a significant impact on your estate.
What is legal disability?
disabling injuries in an accident or from an illness, most of us will become physically or mentally unable to handle our affairs at some point late in life. However, if we leave ourselves open to the court system and all of its expense and uncertainty, we do
TOM TUOHY
“Person under legal disability” means a person 18 years or older who (a) because of mental deterioration or physical incapacity is not fully
so at our peril. In my career, I have seen estates completely lost and families torn apart in guardianship proceedings. The system is open for abuse from greedy relatives and
“friends.”
FOP
The solution is doing something in advance. Plan now. In the case of legal disability, one of the controlling factors is the court’s concern to preserve assets in your name as well as to protect your welfare. Do you want a court to be involved in your life? If not, it is time to take steps to control your assets and choose what circumstances need to exist before
you are considered disabled:
• Execute a financial power of attorney while you have your
capacity. Specify who your agent should be in the event of your incapacitation. Choose your doctor, not one who is court-appointed, to determine your capacity.
• Execute a healthcare power of attorney and appoint a trust- ed person to make healthcare decisions on your behalf if you are unable to do so yourself.
• Remove your assets from the court’s guardianship control by transferring them into a living trust. A living trust pro- tects your assets from probate court at your death, and it also protects you during your lifetime in the event of a dis- ability. Your successor trustee will manage your assets when you are unable. Your family doctor, not one who is court-ap- pointed, determines your capacity.
What if your child becomes disabled?
If one of your children or another beneficiary of your estate currently has a disability, it is essential that you have a living trust estate plan with supplemental needs instructions. What if they acquire a disability before your death by accident or ill- ness? If you do not have a living trust that includes an SNT pro- tection, your child will either lose his or her public benefits or what you leave behind will go to the government for reimburse- ment of SSI and Medicaid.
Take steps now to ensure that if something happens to affect your capacity, or if one of your children/beneficiaries acquires a disability, your assets are not at risk and you are fully protected.
A revocable living trust is a written, legal document that al- lows you to privately and efficiently pass your assets (real prop- erty, bank accounts, stocks, saving certificates, personal prop- erty, etc.) to your family, friends or charities after your death — outside of probate court. (Remember, all wills are subject to probate.) Your life insurance policies and deferred compensa- tion accounts can name your living trust as beneficiary, subject to essential tax considerations.
Call my office today to lock in your FOP 50 percent reduced rate for a living trust.
Registration in the Benefits Plan for FOP members and family is free.
Visit www.fopbenefitsplan.com or call 866-729-5454 for as- sistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Ben- efits Plan. He has been a police lawyer for 36 years. His father was a CPD detective, and his grandfather was CPD Chief of Major Investigations. You can reach Tom at 312-559-8400.
able to manage his or her person or estate, or (b) is a per-
son with mental illness or is a person with developmental disabilities and who because of his or her mental illness or developmental disability is not fully able to manage his or her person or estate, or (c) because of gambling, idleness, debauchery or excessive use of intoxicants or drugs, so spends or wastes his or her estate as to expose himself or herself or his or her family to want or suffering.
(Source: P.A. 88-380.)
Like most statutes, it is easy to get lost in the details. Simply put, you can be declared legally disabled if someone petitions the court with the allegation that you are not fully able to man- age your person or estate.
A person cannot be declared “disabled,” or incompetent, for questionable behavior alone. However, if that person is shown to lack the capacity to make sound decisions, a court can issue an order of legal disability and grant a guardianship.
Can it happen to you?
Let’s be honest: if we live long enough, even if we do not suffer
Benefits Plan
What is the solution?
60 CHICAGO LODGE 7 ■ JANUARY 2019