Guest Blogger: Josh Didion
Josh Didion is a member of the law firm of Semro, Henry & Barga, Ltd. His focus is on trust and estate planning, business, and real estate. Josh is a board Certified Specialist in Estate Planning, Trust and Probate Law. He represents individuals and families, helping his clients to identify their estate and business planning needs, tailoring a plan to meet those needs, and acting as the go-to advisor to implement the plan. Josh also regularly advises clients on the administration of wills, trusts, and other probate matters, including guardianships and conservatorships. Click here for more information.
Trusts as an Alternative to Guardianship
Most families will eventually confront issues about the future of a vulnerable loved one. A common strategy for obtaining care for an incapacitated loved one is through a guardianship. While a guardianship (or a “conservatorship” in Michigan) is sometimes necessary for this purpose, using a trust can often do the same without being as restrictive.
Guardianships are governed by state law, meaning that depending on which state you are in, there are differences. For example, Michigan and Ohio laws on guardianships differ on when an individual is deemed incapacitated, authorities of the guardian, and court reporting frequency, content, and sanctions. Regardless of the state though, guardians have a continuing duty to submit regular reports to the court and to obtain court approval for many decisions. Ohio also requires mandatory adult guardianship education before serving as a guardian.
Trusts should be considered over guardianships. Trusts also require a person (the trustee) to manage assets for the well-being of the incapacitated loved one. A trust, however, requires no court oversight. A trust can also include provisions to permit a beneficiary the ability to participate in decision-making to the extent he or she is able. If desired, the trust can include a separate advisor to monitor the trustee and advocate for the beneficiary. If structured correctly, any assets or inheritance the beneficiary receives is protected from creditors and will not affect his or her eligibility for government benefits. Additionally, the establishment of a trust is often the most effective way to secure and prevent wasting of assets. When combined with powers of attorney, a trust can often completely eliminate the need for a guardianship.
Like any matter involving complex legal and financial issues, experienced practitioners should be consulted, and many factors should be taken into account when planning. A multitude of trust and planning options are available, including special needs trusts, which can provide for an adult child’s needs after the death of his or her parents. An important part of any incapacity-related legal planning is to also coordinate estate planning documents in order to clearly state an individual’s wishes. In the event that formal guardianship and conservatorship become the only option, expressions of intent within estate planning documents can play a critical role in the nomination of a conservator or guardian.
For more information, visit www.semrohenry.com.