Estate Planning FAQ
What is a Will?+
The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate, and they have no legal authority until the will-maker dies and the original will is delivered to the Probate Court.
Everyone with minor children needs a will. It is the only way to appoint the new “parent” of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.
What is a Living Will?+
A living will (also known as an Advance Medical Directive) allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself.
Oftentimes, a living will is executed along with a Durable Power of Attorney for health care. This gives someone legal authority to make your health care decisions when you are unable to do so yourself.
What is a Durable Power of Attorney and when do I need one? +
These allow you to appoint someone you know and trust to make your personal health care and financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a probate proceeding known as a guardianship and conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.
What does Intestacy mean?+
If you die without a will, the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use it.
What is a Probate?+
Probate is the court and process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: minor children (under age 18 in most states), incapacitated adults, and people who have died without legal arrangements to avoid probate.
Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.
What are Beneficiary Designations?+
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts.
What is Joint Tenancy with Rights of Survivorship? +
The most common form of asset ownership between spouses. Joint tenants with rights of survivorship ensures both spouses are co-owners of the property as provided for by the deed. The surviving spouse – originally a co-owner immediately becomes the sole owner of the property upon the death of the other spouse. In most cases, probate has avoided the rights of survivorship supersedes the deceased spouse’s heirs in the terms of their last will and testament or living trust. However, when the second spouse dies or BOTH spouses die at the same time, the property still must still go through probate unless other arrangements have been made such as placing the property into a trust.
What is a Revocable Living Trust?+
An agreement between three parties: the trust-makers, the trustees (or trust managers), and the trust beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die.
Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trust-maker’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. A revocable living trust may allow them to accomplish all this outside of any court proceeding.
Who should have a Revocable Living Trust?+
Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.