Estate planning is a field of law that prepares wills, powers of attorney, and trusts for seniors upon their incapacity or death. Simply put, estate planning is making sure your legal affairs are in order if something serious happens to you. One of my client’s passed away within the past two (2) weeks and his family affairs are complex and a mess.
Seniors and people often have complex family situations, which make the inheritance of assets an interesting story. Furthermore, family members and friends state that their family or friends promised them an inheritance and often times, this promise or believed promise does not occur. Despite any oral or written promises, the only way to guarantee that your legal affairs are in order is to follow the proper laws.
In the area of estate planning, wills and living trusts and powers of attorney are the key documents, which distribute your assets upon a death or incapacity. At a minimum, every senior should have a will, power of attorney for property, and power of attorney for healthcare. A will is a written device, which explains your legal wishes and often times, is notarized and witnessed by at least two (2) impartial witnesses. A power of attorney is a document where a senior grants another person the power to make decisions in case of their incapacity. A power of attorney is effective for the duration of one’s life or only during a brief period of time. There are two (2) types of powers of attorney: property and healthcare.
There are critical differences between a will and a living trust. Often times, a living trust is called a “Revocable Living Trust” because it may be amended and it serves its’ purpose during your life. Unlike a will, a living trust is equipped to deal with your property while you are alive. A will is a document that distributes your property upon your death. A living trust is a powerful legal tool because it avoids the pain of a court proceeding called probate court. Probate court is a court that hears claims brought by family, friends, and creditors of a deceased person. A living trust is also a private document unlike a will, which is public information.
In conclusion, the topic of estate planning is a difficult but necessary topic. In most families, families are complex and have step parents, step children, disabled children, and many other complex situations that make senior’s estate planning more complex than most seniors realize.