What is a Last Will and Testament?
When you die, you can leave instructions behind to deal with the distribution of your property and make arrangements for your minor children. Some property will transfer automatically to another person, but some might not and you will need a Last Will and Testament to make it happen. If you have children and are no longer married to the other parent or if you have sole custody, it is important for you to address this situation in your will.
What are Living, Inter Vivos, Testamentary, Revocable, or Irrevocable Trusts?
Trusts are collections of property (usually money, real estate, and investments, but they can be anything) that are given to the Trust by someone, taken care of by someone, and are used to benefit someone. Frequently the person giving the property to the Trust will also take care of it for his own benefit while he is alive and for someone else's benefit when he is dead. When he can no longer take care of the trust, another person, the new “Trustee”, will take over managing the property. Eventually all of the property will have to be distributed to other people and the Trust terminated. A "Living Trust" is English for the Latin term, "Inter Vivos" and only means that it was made while the person was alive. A Testamentary Trust was made by the Last Will & Testament. If a Trust is revocable, the person making it can end it before it was initially intended to end. If it's irrevocable, he can't.
What is a Power of Attorney?
A Power of Attorney allows someone else to speak for you and act on your behalf. It can be so wide and sweeping that they only thing the Attorney in Fact can't do for you is vote, get drafted, or go to jail. It can be so specific that it can only be used to sell your car for you next Tuesday. These are very powerful instruments and you make them at your peril. The rest of the world has a right to believe in the Power of Attorney. Drafting one without using an experienced lawyer is risky. One might even say idiotic. And potentially very, very expensive. Do you know how to revoke it?
What are Living Wills / Advance Directives / Health Care Power of Attorney?
What we still tend to think of as "Living Wills" are now called "Advance Directives". They tell the medical providers what you want to have happen if you can't communicate for yourself. The Durable Power of Attorney for Health Care appoints someone to decide for you and speak on your behalf following the instructions that you have outlined in the Advance Directives. This is different from a Do Not Resuscitate Order. This you should consult not only an attorney about, but speak also with your physician. If you don't take charge of your life and death, the State may do it for you.
Why do Estate Planning?
Case 1 ~ Worst Case: Person dies with no will and no directions about what happens to his property. All of his property must be reported to the court and all of those inventories of property and money are public records. Appraisers and an Administrator are appointed. The Appraiser gets paid. The Administrator gets paid a percentage of the value of the estate. All of the things in the estate are sold unless everyone allowed to inherit agrees, and the money is divvied up among the nest of kin. And the next of kin are determined by a statute- not by whom the dead guy liked best. So if you really wanted Aunt Aggie's Candy Dish you are probably out of luck unless you can buy it from the estate.
Case 2 ~ Best Case: Everything is pre-arranged from the property distribution of the house, to the money, to the the stuff in the house, to the funeral arrangements. If the probate court needs to be involved at all it will be minimal and for taxation and money transfer purposes.
And lots of cases in between the two.
When you die, you can leave instructions behind to deal with the distribution of your property and make arrangements for your minor children. Some property will transfer automatically to another person, but some might not and you will need a Last Will and Testament to make it happen. If you have children and are no longer married to the other parent or if you have sole custody, it is important for you to address this situation in your will.
What are Living, Inter Vivos, Testamentary, Revocable, or Irrevocable Trusts?
Trusts are collections of property (usually money, real estate, and investments, but they can be anything) that are given to the Trust by someone, taken care of by someone, and are used to benefit someone. Frequently the person giving the property to the Trust will also take care of it for his own benefit while he is alive and for someone else's benefit when he is dead. When he can no longer take care of the trust, another person, the new “Trustee”, will take over managing the property. Eventually all of the property will have to be distributed to other people and the Trust terminated. A "Living Trust" is English for the Latin term, "Inter Vivos" and only means that it was made while the person was alive. A Testamentary Trust was made by the Last Will & Testament. If a Trust is revocable, the person making it can end it before it was initially intended to end. If it's irrevocable, he can't.
What is a Power of Attorney?
A Power of Attorney allows someone else to speak for you and act on your behalf. It can be so wide and sweeping that they only thing the Attorney in Fact can't do for you is vote, get drafted, or go to jail. It can be so specific that it can only be used to sell your car for you next Tuesday. These are very powerful instruments and you make them at your peril. The rest of the world has a right to believe in the Power of Attorney. Drafting one without using an experienced lawyer is risky. One might even say idiotic. And potentially very, very expensive. Do you know how to revoke it?
What are Living Wills / Advance Directives / Health Care Power of Attorney?
What we still tend to think of as "Living Wills" are now called "Advance Directives". They tell the medical providers what you want to have happen if you can't communicate for yourself. The Durable Power of Attorney for Health Care appoints someone to decide for you and speak on your behalf following the instructions that you have outlined in the Advance Directives. This is different from a Do Not Resuscitate Order. This you should consult not only an attorney about, but speak also with your physician. If you don't take charge of your life and death, the State may do it for you.
Why do Estate Planning?
Case 1 ~ Worst Case: Person dies with no will and no directions about what happens to his property. All of his property must be reported to the court and all of those inventories of property and money are public records. Appraisers and an Administrator are appointed. The Appraiser gets paid. The Administrator gets paid a percentage of the value of the estate. All of the things in the estate are sold unless everyone allowed to inherit agrees, and the money is divvied up among the nest of kin. And the next of kin are determined by a statute- not by whom the dead guy liked best. So if you really wanted Aunt Aggie's Candy Dish you are probably out of luck unless you can buy it from the estate.
Case 2 ~ Best Case: Everything is pre-arranged from the property distribution of the house, to the money, to the the stuff in the house, to the funeral arrangements. If the probate court needs to be involved at all it will be minimal and for taxation and money transfer purposes.
And lots of cases in between the two.
“… the best time to plant a tree is always twenty years ago. If, for some reason, you did not plant it then, the next best time to plant a tree is now.” ~ Carlos Acosta