What is Estate Planning?
The area of law relating to planning for the inevitability of death,
such as obtaining life insurance to pay for the costs of a funeral,
preparing a simple Will. More comprehensive planning such as preparing
a more complex Will, Trust, and related estate planning documents may
also be needed. It depends on the size of your estate and how comprehensive
your needs are.
What is a Living Trust?
A Living Trust is a special legal entity that is legally capable of
owning your property. You can be the person in charge of the Trust,
that is a "Trustee" of your own Living Trust, keeping full
management and control over all property transferred by you to the Trust.
There are many kinds of trusts. A "Living Trust" (also called
an "inter vivos" trust) is a trust you create while you are
alive, rather than one that is created at your death under the terms
of your Will (a Testamentary Trust).
Revocable Living Trusts are specifically designed to avoid probate of
your estate after your death and, as the name suggests, may be amended
or revoked by you during your lifetime.
What is a Living Will?
A living will is a legal document through which you state what medical
treatment you want offered and what you want withheld. It is called
a living will because it takes effect while you are still living. Generally,
in the event you should suffer an irreversible coma or face "imminent
death" from a terminal illness, the will allows you to speak now,
in preparation for a time when you will be unable to speak for yourself.
What is a Power of Attorney?
A power of attorney is basically a written document that authorizes
someone else to act on behalf of and as agent for you. If you make a
power of attorney, you are commonly referred to as the principal. The
person to whom you have given the power of attorney to act on your behalf
is referred to as the attorney in fact or agent.
Your power of attorney can be a general power of attorney, which authorizes
your agent to conduct your entire business and affairs. A limited or
special power of attorney authorizes your agent to conduct specified
business or perform a single act on your behalf.
What is Probate?
Probate is a legal process that takes place after someone dies and
usually involves several steps. It is generally overseen and accomplished
by the executor if there is a will, or by a court appointed representative
if there is not. Though state laws vary, probate typically includes:
1. Identifying
and inventorying the deceased person's property.
2. Accounting and appraisal of the property.
3. Payment of taxes and creditors.
Prior to paying
taxes and creditors, the surviving spouse and/or children are usually
allowed an specific amount under state law. Typically that amount is
paid first. After that, the claims against the estate are paid.
4. Formal distribution
of the remaining property as the will directs, or by the state laws
of intestate succession, if there is no will.
In most states,
smaller estates may fall within a probate exemption which allows a certain
amount of property to pass free of probate, or through a simplified
procedure.
What is a Trust?
Trusts are legal systems through which you or someone you love benefits
from your assets but doesn't technically own them. Like some corporations,
trusts are paper entities that have the ability to own property. When
you place your assets in trusts, you no longer actually own them. The
trust to which you have assigned them does
What is a Will?
Wills are the most basic of estate-planning tools. They are legal documents
that outline which of your loved ones get what part of your estate.
Unfortunately, wills are virtually always subject to a long--and often
costly--probate process.
