One of the most frequent questions I get from my clients is “Why should I spend the money to create a trust?”

The easiest answer to that question is that for the price you pay now, you save far more money down the road. But that answer doesn’t satisfy everyone. So here is one serious money-sucking situation that might make you think twice before dismissing your need for a trust.

In the event of your incapacity, the court may impose a conservatorship because the individual can no longer handle his or her own finances. Anytime you have to initiate court proceedings, you’re looking at a significant investment of time and money – more of both if the proceedings are contentious.

Also, nearly anyone can petition the court to become your conservator if they can show that you no longer have the capacity to manage your affairs. We have seen this most recently where an advocacy group for child actors, A Minor Consideration, petitioned the court to take control of the finances for the 14 children of OctoMom, Nadya Suleman. An Orange County judge has given the green light to the group to proceed with their case.

However, you might become incapacitated for any number of reasons in your life having nothing to do with the Hollywood scene, including dementia, illness, disease, or accident.

By creating a revocable living trust, you designate ahead of time a successor trustee who you want to be in charge of your affairs should you become incapacitated. Moreover, you can designate exactly what property that person can control and choose different individuals to manage multiple assets. Most people transfer the title to their house into a living trust so that the successor trustee would be able to manage the affairs of the home.

Your life is probably not as crazy as the OctoMom’s, and you may never have Lindsay Lohan or Britney Spears’ problems (both have battled conservator petitions in court), but you may one day be struck by Alzheimer’s disease, or an accident or illness resulting in a coma, any one of a number of mundane real life disasters that strike regular people.

You and your estate planning attorney have tools available to prevent confusion in your family and keep them from fighting for control should you become incapacitated.

James D. Perry

Up until last month, Whittier, California was best known for being the hometown of Richard Nixon — and me. It looks like this honor will now pass to Nadya Suleman’s octuplets and her six other kids.

I’m still waiting by the phone for Nadya to call me for some estate planning advice. I assume that in light of the numerous death threats she has received she will want to write a will and appoint guardians to take care of her kids in the event of her early demise.

Nadya, or any parents with young children should name one personal guardian for each child, and an alternate in case the first choice can’t serve.

Under California Probate Law, you may name more than one guardian, but it’s generally not a good idea because of the possibility that the coguardians will later disagree. On the other hand, if you prefer that two people care for your child — for example, a stable couple that would act as coparents – you should name both of them, so that they each have the legal power to make important decisions on behalf of your child.

Here are some things to consider when choosing a personal guardian for your kids:

Is the prospective guardian old enough? The person must be at least 18 years old in most states.
Does the prospective guardian have a genuine concern for your children’s welfare?
Is the prospective guardian physically able to handle the job?
Does he or she have the time?
Does he or she have kids of an age close to that of your children?
Can you provide enough assets to raise the children? If not, can your prospective guardian afford to bring them up?
Does the prospective guardian share your moral beliefs?
Would your children have to move?

If you’re having a hard time choosing someone, take some time to talk with the person you’re considering. One or more of your candidates may not be willing or able to accept the responsibility, or their feelings about acting as guardian may help you decide.

In Nadya’s case, news reports lead me to believe her parents may not want the job of guardian for the octuplets. They have their hands full helping out with their first six grandchildren. Since Nadya is an only child herself, she can forget about sisters and brothers taking the job.

Any volunteers out there?

James D. Perry