People with little assets other than their home many times need a living trust more than individuals with more assets. Why? Picture this scenario: With the high cost of housing in the San Diego area, many couples both work to pay the mortgage on their home. They don’t have a will or a trust but own their home in joint tenancy. Husband is involved in a serious accident and has a brain injury which makes him unable to work and incompetent. They need to sell their home because of the loss of husband’s income. How is the wife going to sell the property?
Since the title is held in both their names, the wife cannot sell the home because the husband is incapacitated. The joint tenancy with right of survivorship only applies if the other joint tenant is dead. The husband is not dead and they both need to sign the escrow documents. Even if they had wills, a will would not be of any assistance because the husband is still alive. The wife’s only alternative is to have her husband declared incompetent and become his conservator. Conservatorship is costly and takes time. With mounting medical bills and loss of husband’s income, there is no money to pay for a conservatorship. Also a prospective sale may be lost during the time it takes the court to appoint the wife as conservator.
A revocable living trust would have avoided this problem. With a revocable living trust, there are incapacity clauses contained in the trust. Both spouses are usually trustees but one can serve as sole trustee in the event of a incapacity. There are also durable powers of attorney which enable you as your spouse’s agent to take over the finances and sell the house. In addition, powers of attorney for health care are included in our revocable living trust package that allow you to make decisions about your spouses’s health care including life support and other measures. Contact us at Law Office of Scott C. Soady, A Professional Corporation,LLP to set up a free consultation about living trusts.