Estate Planning: Wills, Trusts And Powers Of Attorney
The term Estate Planning is one that people often don’t fully understand. They usually think of wealthy people setting up Trusts to minimize taxes and make sure Junior doesn’t go through his inheritance too quickly. While Estate Planning applies to everybody and how they are planning to deal with issues that will for sure arise in their lifetimes. In fact, not doing anything is really an estate plan, it is letting the government make critical decisions for you. If you’re like most people and aren’t comfortable with the government choosing who gets what you own, who will handle your estate, or who will take care of your kids, or other important decisions that will inevitably come up, then take the time today to protect the people you love.
A Will is an important part of any estate plan. Without it, the cost of transferring your property to the ones that you love and take care of will go up, leaving less behind to benefit your family. Having an experienced attorney draft your Will is the best way to ensure that everything is properly done and that your wishes are carried out.
There is a lot more that a well drafted Will is going to accomplish, beyond laying out who is to get what. It will direct the court as to which kind of probate process should be used, and how much supervision will be necessary. It will make sure that no bond needs to be posted during the estate administration. It will lay out who should manage your estate. It will nominate guardians for your children, giving you control over who raises them should anything happen to you. For minor children there are often trust provisions that help manage your assets and ensuring that they are available for your kids for many years to come. It will contain an affidavit which greatly reduces the chance that the Will will be contested in court. It will ensure that any property that isn’t specifically devised winds up going to where you would want it to go. And it will simplify and reduce the cost of administration.
A Will can be a very simple document and it can be very complex. It is important to work with a lawyer that will examine your situation and your goals, and come up with a document that will carry out your wishes when you are gone and that will actually work when it comes before a court. A Will is the most affordable estate planning options, almost always costing less than $500.
If I have a Will can I avoid probate?
No. Any property that is transferred by a Will has to go through a probate process before it will be transferred. If avoiding probate is something that you wish to do, and it is for a lot of people as it can be a fairly expensive process and the process is open to the public, then you should think about preparing a trust, and using other probate-avoiding methods such as joint tenancy and lifetime transfers.
Do you need a trust? Maybe. Single individuals, married couples, members of domestic partnerships and those who have accumulated even modest estates, including equity in a home, might benefit from establishing trusts. Our firm can help you determine whether a trust is appropriate in your situation, or if a modest will is sufficient.
A trust helps your beneficiaries avoid probate in most circumstances. A trust is private, efficient and minimizes taxation. Assets placed in a living trust may transfer automatically upon the death of the original owner, passing to the spouse, children or other heirs without going through the public process of probate. A trust is commonly included in an estate plan as an asset preservation strategy in the face of estate taxes and the rising costs of probate.
POWERS OF ATTORNEY
A Power of Attorney allows a person to act on your behalf. While you can decide what powers to give this person, who is known as an “attorney-in-fact,” in general these powers deal with financial matters such as banking transactions and transactions involving your property.
A Power of Attorney is an important piece of any successful estate plan as it allows someone to take care of your finances when you are incapacitated and unable to do so. For instance, a bank is not going to allow someone who doesn’t have access to your account to get money out of it to pay your bills and other expenses. If you do not have a Power of Attorney, someone will have to go to court to appoint a Guardian or Conservator to handle a lot of your affairs, and this is both very expensive another source of stress in what is already a very difficult time.
A Power of Attorney can also be used if you are unable or unwilling to handle your financial affairs and would rather have somebody else have the power to do so for you.
Does the person I appoint as my attorney-in-fact have to be an actual attorney?
No, anyone can serve as your attorney-in-fact. It is important to only give the Power of Attorney to someone that you trust, however, because the powers that this document grant that person allow them to act in your place.
Can I wait until I actually need someone to act for me to have a Power of Attorney prepared?
It is important to have your Power of Attorney prepared before you need it, because in many cases it is only going to be used when you are incapacitated. And one of the legal requirements for a Power of Attorney to be valid is that it must be executed by a person that is competent under the law. That means that if you are incapacitated, you will be unable to execute this document, and your family is going to have to go to court to have a Guardian or Conservator appointed to handle your affairs, which is an expensive procedure that you want to avoid if possible.