Planning for what happens after someone dies can be uncomfortable, even morbid. However, it is important that everyone take time at some point in their life to think seriously about planning their estate. An estate is everything that someone accumulates in their lifetime. This can be stocks, cash, property, and all their individual possessions or knick-knacks.
Luckily, when it comes time to make an estate plan, there are some universal tools that have been put into place to help make the process more streamlined: wills, trusts, and power of attorney.
The most basic form of estate planning, a last will and testament, is a legal document that expresses your wishes for your estate once you pass on. Wills can come in many forms, from simple to complex depending on the needs of the individual. All wills will need to clear the probate court’s scrutiny.
The probate court is the governmental force responsible for settling the affairs of someone who has died. The court’s chief purpose is to make sure that the outstanding debts of the individual are settled. Once all creditors have been paid, the court will proceed using the deceased’s will as a guide.
Most people will be satisfied with a basic will. A basic will consists of the individual writing out what they want to do to split up their estate and who they want to give the pieces to. Another type of will is known as a joint will. This type of will is established between spouses and often involves transferring most or all assets to the surviving spouse when one spouse dies.
Whatever kind of will an individual settles on, it is important to have one. Without a will, the individual will be declared intestate. An intestate person will have their assets divided according to state law. This will exclude any unmarried partners, friends, or outside organizations from claiming any part of the individual’s estate since most state laws strictly limit asset distribution to family members. State division of assets starts with spouses before moving to parents, siblings, and more distant relatives.
In addition to writing a will, individuals who have larger value estates or those who wish to impose certain limitations or rules on what their heir inherit may consider using a trust. A trust is a financial agreement that places assets from one person, called the grantor, into the care of a second person, known as the trustee, for the ultimate benefit of a final person known as the beneficiary. Trusts can contain non-physical assets such as stock portfolios or physical assets like a house. Trusts are advantageous primarily because they can bypass the probate process after the grantor’s death and can sometimes also avoid taxes associated with the estate and inheritance.
Most trusts fall into two categories: revocable and irrevocable. A revocable trust allows the grantor the ability to change the trust once it has been created. These changes can include adjusting the assets in the trust, adjusting who gets the assets in the trust, when the assets in the trust transfer ownership, and even whether or not to dissolve the trust entirely.
On the other hand, an irrevocable trust sets its terms in stone once it is written. The benefit to an irrevocable trust is that since the terms cannot be changed and the assets in the trust are removed from the grantor’s legal possession, the assets in the trust cannot count against the grantor for tax reasons.
One of the other areas of estate planning involves end of life care. Unlike most estate plans, which create contingencies for after a person dies, end of life care is the vital process of establishing what a person wants done to them when they are not able to advocate for themselves.
This inability to advocate for oneself is referred to in the legal world as incapacity. A person who is declared incapacitated lacks either the physical or mental facilities to advocate on their on behalf for their own best interests. One way that an individual can enforce their wishes even if they are incapacitated is a living will.
A living will, also known as an advanced directive or health care directive, is a legal document in which an individual expresses their preference for how they should be taken care of when they cannot advocate for themselves. This can include circumstances under which the individual should not be resuscitated, when and how medical treatment of pain should be administered, or whether the individual wishes to pass away in hospice or in their home.
While a living will does allow for an individual’s preferences to be known, a living will is still just a document. A more active way for an individual to enforce their wishes is through a power of attorney. A Power of attorney document allows an individual to establish someone else as their agent. This agent will be responsible for advocating on behalf of the incapacitated person to represent their wishes regarding their healthcare.
If you are looking to begin your estate planning journey, whether it is to create a power of attorney, a trust, or a will, you will need an experienced trusts & estates attorney. A trusts & estates attorney can consult with you about the best options to create an estate plan and execute them in a way that makes them resistant to challenge from probate courts and specifically tailored to your needs. The best place to find a trusts & estates attorney is at Attorney at Law.
At AAL, our nationwide network of attorneys and law firms allows us to match you with an experienced trusts & estates attorney in your area. Our partners have the resources, legal expertise, and experience necessary to unravel even the most complex trusts & estates cases.
In addition to resources and experience, our partners also excel in client care. Our partners understand that at the core of a trust & estate case is the loss of life and the desire to see the estate distributed in a way that honors the deceased.
Don’t wait. Contact AAL today for a free, no-obligation consultation and secure your future.