With the advancement in healthcare and medical science, our life expectancies have increased. However, ageing comes with other problems such as Alzheimer’s, Parkinson and other cognitive disorders leaving one in a position where they cannot manage their assets and financial investments.
In such a state of incapacitation, planning for it is an essential area of estate & succession planning before one can pass on his/her assets to the legal heirs so that one can fully enjoy the benefits of the hard-earned assets. Below are some remedies that a person can prepare for in such an eventuality:
It means adding an additional owner to your bank accounts, Demat account and other investments. The joint owners should be able to operate the accounts jointly or severally. The chosen joint owner should be someone you trust and who can take decisions and transact as you do.
Power of Attorney (PoA)
Appoint a trusted family member or a person through a PoA who could manage your assets in case of your incapacitation. This is important especially for immovable assets because even if the asset is held jointly, the consent of all the joint owners is required for dealing with immovable properties unlike in a bank account.
Private family trust
Create your own private trust and retitle your assets in the name of the trust. You could be the trustee and continue to manage the assets for your benefit and designate people whom you trust as successor trustees who could manage your estate when you are not able to do so due to old age or incapacitation. The trust assets will provide for your support, maintenance and medical needs, and after your lifetime the trust will continue for your family members and children. The trust deed should have a provision stating that if you become incapacitated then the successor trustee named in the trust deed would assume the responsibilities to manage the assets for your benefit. You could lay down guidelines with respect to to investments and trust distributions.
Prepare a Will early One should not wait for extreme old age or a deathbed event to prepare a Will. In order to prepare a Will, one should be in a sound state of mind and with old age, this state keeps deteriorating. It is important to have a Will early because once you become mentally incapacitated, you will no longer be competent to prepare it.