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How Can We Protect Our Assets if We Become Incapacitated?
My wife and I are in our 60's and have had to deal with aging parents who made some poor financial decisions later in life. How can we protect our assets from being given away by us should our mental capacities diminish? If we put them all in our children's names and they are sued, would we lose our assets?
Good questions. First, don't put your assets in your kids names. They would be at risk if they were sued, went bankrupt, got divorced, passed away, or simply made some bad decisions. Do execute durable powers of attorney which would appoint someone else to manage your financial and legal affairs when you are no longer able to do so. But even better, you and your wife can create a revocable living trust with one or more of your children as co-trustees. The funds would still be yours to manage and use as you choose now, but your co-trustee could receive monthly statements and could step in when and if necessary. An estate planning attorney can explain other advantages of these trusts.