What is a plan entrusted form and what does it do?

By appointing a plan entrusted form, individuals can ensure their financial affairs will be managed according to their wishes, even if they become incapacitated.

Feb 22, 2025 at 05:55 pm

Key Points:

• A plan entrusted form is a legal document that enables an individual or entity to manage their assets and make decisions regarding their financial affairs in the event of incapacity.
• It specifies the powers granted to the trustee, the scope of their authority, and the beneficiaries who will receive the assets.
• The form provides guidance and safeguards to ensure the proper management and distribution of assets, promoting financial stability and peace of mind.

What is a Plan Entrusted Form?

A plan entrusted form is a vital legal tool that empowers individuals to plan for their financial well-being in the face of potential incapacity. This form allows a person (the "grantor") to appoint a trusted individual or entity (the "trustee") to handle their financial affairs and make decisions on their behalf if they become unable to do so.

By establishing a plan entrusted form, the grantor ensures that their assets will be managed according to their wishes even in unforeseen circumstances. The form outlines the specific powers and responsibilities of the trustee, including the authority to invest assets, manage income, pay expenses, and distribute funds to beneficiaries.

Functions of a Plan Entrusted Form:

1. Asset Management:

   • The trustee is responsible for managing the grantor's assets, including investments, property, and other financial holdings.
   • They must adhere to the terms of the plan entrusted form and act in the best interests of the grantor and beneficiaries.

2. Decision-Making Authority:

   • When the grantor becomes incapacitated, the trustee has the authority to make financial decisions on their behalf.
   • This may include managing investments, paying bills, and arranging for appropriate care and support.

3. Beneficiary Protection:

   • The plan entrusted form designates beneficiaries who will receive the assets upon the grantor's death or recovery of capacity.
   • The trustee ensures that the assets are distributed according to the grantor's wishes and protects the interests of the beneficiaries.

4. Flexibility and Adaptability:

   • Plan entrusted forms allow for flexibility and adaptability to changing circumstances.
   • The grantor can amend or revoke the form if their circumstances or wishes change.

5. Peace of Mind:

   • By establishing a plan entrusted form, the grantor gains peace of mind knowing that their assets will be managed responsibly and their wishes will be respected in the event of incapacity.

FAQs:

Q: Who can appoint a plan entrusted form?
A: Any individual who is of sound mind and has the capacity to make legal decisions can appoint a plan entrusted form.

Q: Who can be appointed as a trustee?
A: A trustee can be a family member, friend, attorney, or a professional fiduciary. The grantor should choose someone they trust to manage their assets responsibly.

Q: What are the benefits of having a plan entrusted form?
A: A plan entrusted form provides peace of mind, ensures asset management, protects beneficiaries, and allows for flexibility and adaptability to changing circumstances.

Q: What happens if the grantor recovers capacity?
A: Upon the recovery of capacity, the grantor can revoke or amend the plan entrusted form, and their powers and responsibilities will be reinstated.

Q: Is a plan entrusted form legally binding?
A: Yes, a plan entrusted form is a legally binding document that creates a fiduciary relationship between the grantor and the trustee.