Estate Planning
Estate planning involves the drafting and finalizing of documents that pertain to your property, which is typically done with the help of an estate planning attorney. There are many different aspects to planning an estate, like wills, trusts, health care directives and proxies. A lawyer can explain the ramifications of each estate planning instrument and advise you on how best to proceed.
Estate planning mostly focuses on distributing property after your death. However, planning an estate can also concern how property is handled during your lifetime.
Last Will and Testament
The cornerstone of many estate plans is the last will and testament. This document details how you want your property managed or inherited after your death. The testator is the person to whom the will belongs. Most states require that the testator be at least 18 years old and of sound mind at the time they create the will. An estate planning lawyer can listen to your preferences and draft a last will and testament according to your instructions.
You can appoint a person to manage property after your death, called an executor. This person is responsible for complying with state laws regarding probate and distributing property. The executor follows the directions in the will, pays off creditors, and then distributes the remaining property to your beneficiaries. You can also appoint a guardian for your minor children in a will.
If you want to change your will, an estate planning attorney can draft an addendum to the will, which amends its terms without having to create an entirely new document.
Trusts
A lawyer can also help you create a trust. A trust is a tool that allows another person, called the trustee, to hold assets that have been placed into the trust on behalf of a beneficiary. Depending on which type of trust you create, you can serve as the trustee of your own trust.
The trust document states when the trustee should make disbursements to the beneficiaries. This legal tool is sometimes used alone or in addition to a will. Some states allow for a testamentary trust that only goes into effect when the testator dies. However, living trusts can also be created that provide periodic distributions or distributions at appointed times, such as when the beneficiary reaches a certain age or graduates from college.
Power of Attorney
A power of attorney allows one person, the agent, to act on behalf of the other person, the principal. This type of legal document allows the agent to handle the legal and financial affairs of the principal. It can be broad, providing for an agent to exercise all legal rights on behalf of the principal. In contrast, a power of attorney can provide for only specific powers, such as selling a piece of real estate.
You can decide when a power of attorney goes into effect. A power of attorney can include a set period of dates. Alternatively, it can spring into effect later at the time of an event you determine. If you want a power of attorney to remain in effect even if you become incapacitated, a power of attorney must be designated as durable.
Health Care Documents
There are many wills and estate planning documents that pertain to medical information and directives. A power of attorney for health care or health care proxy allows you to appoint someone else to make health care decisions on your behalf if the principal is not able to make these decisions. This document sets out the scope of the power, such as stating that a power of attorney can access the principal’s medical records and talk to health care personnel to make decisions on behalf of the principal.
A living will is a document that may supplement the power of attorney document. It allows you to give instructions regarding the type of life-sustaining treatment you should receive if unconscious for a prolonged period or incapacitated. These instructions include whether the principal will receive sustenance and hydration, or the use of breathing machines or feeding tubes.
Additional Estate Planning Articles
- What Is Estate Planning?
- Annuities
- Power of Attorney
- What Happens When a Person Dies Without a Will?
- Protect Your Children With Your Last Will and Testament
- What are Some Typical Estate Planning Documents?
- Naming a Guardian for Your Children
- The Uniform Transfers to Minors Act: An Overview
- Naming Children as Life Insurance Beneficiaries
- What rights do I have in planning a funeral?
- How to Decide if You Need a Trust and Estates Attorney
- What is a variable annuity, and how does it work for estate planning purposes?
- Estate Planning: The Advantages of Annuities
- How Do Retirement Investments Fit Into My Estate Plan?
- What are the tax advantages and/or implications of annuities?
- What are the potential pitfalls of annuities?
- Family Limited Partnerships
- When Is the Right Time to Start Your Estate Plan?
- The 120 Hour Inheritance Survival Requirement
- Understanding Intestate Succession: What Happens When There Isn’t a Will?
- What Legal Issues Are Involved in Winning the Lottery?
- Does a Spouse Automatically Inherit Everything?
- Codicils
- Top 5 Estate Planning Tips for Parents of a Special Need Child
State Estate Planning Articles
- Arizona
- California
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Idaho
- Illinois
- Indiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- New Jersey
- New York
- North Carolina
- Ohio
- Oklahoma
- Pennsylvania
- Tennessee
- Texas
- Virginia
- Washington
- Wisconsin