Don’t let the government, courts, or strangers control your estate
If you don’t create your own estate plan, the government will make one for you. This is probably what you don’t have in mind.
Why do I need an Estate Plan?
Even if you’ve done nothing you already have an estate plan in place, but it might not be the one you would prefer. At your death, the laws of your state of residence and the laws relating to ownership of property would control who receives your assets. The beneficiaries might not be who you’d expect. In the event of your disability, if you are unable to act on your own behalf, your local county probate court might require a close relative or even a spouse to petition for a conservatorship in the absence of a previously established plan in writing.
Why do I hear so much about “Living Trusts?”
Because these versatile documents can help you control many issues, including not only probate avoidance, but also when, how, and to whom your assets will be distributed after your passing and who will control and manage your assets in the event of your disability.
If I have a living trust do I still need a will?
Yes, potentially for several reasons. For example, guardianship (of the person) for minors or other beneficiaries with disabilities after your passing can only be appointed in your will and not in a Living Trust. Also, you will probably want to have what’s known as a “pour over” provision in your will in order to direct assets into your living trust you might have forgotten to previously convey to the trust so that they will be administered under the terms of the trust.
What is a Living Will?
A living will, despite its name, isn’t at all like the wills that people use to leave the property at their death. A living will, also be referred to as a directive to physicians or advance directive, is a document that lets people state their wishes for end-of-life medical care, in case they become unable to communicate their decisions. It has no power after death.
If I have most or all of my assets in a Revocable Living Trust, do I still need a Durable Power of Attorney for financial matters?
Yes. Not all assets can or should be transferred into a living trust. For example, IRA accounts and other retirement plans cannot be legally placed in your living trust. Also, in the event of your incapacity, you would need someone who holds your Durable Power of Attorney for financial matters to be able to make withdrawals or otherwise manage these retirement accounts.
How can I make sure my wishes about what kind of medical measures should or should not be taken to prolong my life?
In the event of your incapacity, so-called “end of life issues” and other medical treatment matters would need to be specified in a document known as an Advanced Healthcare Directive which would clearly spell out your wishes.