Wills, Trusts and Estate Planning
Estate planning is just that, planning in advance for how your wealth, real estate and assets will be distributed to your family and loved ones. It is also about planning in advance for who will make financial and health care decisions for you in the event you become incapacitated. It is also about informing others of your wishes regarding life support and other medical care if you become terminally ill.
Wills
A will is the most common document used to specify how an estate should be settled after death. A will may name a guardian who will take care of minor children if there is no surviving parent; be used to disinherit a child or to dictate who should receive specific items, such as artwork or jewelry. There are, however, certain limits and rules to be followed when putting a valid will together. Also, it is important to consider how the wishes expressed in the will may affect the probate process to be smooth or complicated and drawn-out.
Trusts
There are two types of trust. A testamentary trust which transfers the property to the trust only after the grantor’s death. A living trust is created during the life of the grantor and can be set up to either continue after the grantor’s death, or to terminate and be distributed upon the grantor’s death.
In order to create a valid trust, the owner of property (grantor) transfers the property to a person or institute to act as trustee to hold the property and manage it for the benefit of the beneficiaries. The grantor can name himself or herself or another person as the trustee.
Trusts are extremely complicated and if not done properly, can carry serious taxation consequences.
Powers of Attorney
There are several types of power of attorney, such as financial power of attorney, limited power of attorney, health care power of attorney. It is a legal document that authorizes someone (agent) to act on your behalf.
General power of attorney allows the agent appointed to assist with your financial needs, if you are incapable of doing so. Health Care Power of Attorney allows the agent to make your health care decisions, if you are unable to.
Living Wills
Living Will is a legal document wherein you express your wishes as to life sustaining procedures. It contains specific instructions about what you want done regarding withholding or withdrawing life-prolonging procedures in the event you have a terminal condition, or end-stage condition, or you are in a persistent vegetative state.