As New Jersey residents age, their memories and decision-making processes may decline. Without advanced estate planning, it is possible that the hard work an elderly individual did in order to enjoy his or her retirement could go to waste. An incapacitating illness can sneak up on a person.
Some illnesses such as Alzheimer's or dementia advance in a way that it may not be readily obvious at first. This exposes an elderly person to the possibility of making bad financial decisions. In some cases, they may have no memory of their actions.
In this situation, a living trust could protect a person from making poor decisions when it comes to finances. All of a person's assets are put into this type of trust while they are alive. The trust can be structured to provide certain protections while taking care of the beneficiary's financial needs. In many cases, the trustee of a living trust is also the beneficiary, but that does not have to be the case.
The trustee can be another person or persons that the creator trusts to make decisions on his or her behalf. In the alternative, a bank or corporation can serve as the trustee. Regardless, the trustee should be someone that the individual believes will have his or her best interests at heart.
The key is to find an estate planning strategy that both satisfies and protects New Jersey residents as they age. Many options are available, and they should be explored before any decisions are made. In the end, it is about ensuring that an elderly person receives the benefits of his or her assets for a long time to come.
Source: USA Today, "Preventing bad decisions in old age", Rick Kahler, Sept. 14, 2014