What is a Will?
A will is essential in nominating the person to be responsible for administering your estate and to whom your estate will be distributed after your death.
It is important to understand that a will does not avoid probate court. Although having a will ensures that your wishes will be carried out during the probate process, assets in a decedents name will still have be administered through the probate court. Generally the court costs and attorney fees for the probate of a will average between $2,500 and $4,000.
An important thing to remember with a will is to review it periodically. Wills created years ago may not be appropriate today. Circumstances and laws change constantly meaning that your estate plan may require changes.
What is a Trust?
One of the biggest estate planning mistakes that one can make is failing to consider a revocable living trust.
Many falsely believe that a Trust is only for the wealthy. However, most trusts are designed to avoid probate court. Avoiding probate will save your family time and money if your become disabled or following your death.
A trust requires more effort than simply signing it. You must also re-title all assets such as real estate, bank accounts, stocks, bonds, etc. into the name of the trust in order to avoid probate court.
Like a will, an old trust should be reviewed to make sure it is still appropriate for your circumstances.
What is the difference between a will and a trust?
Nearly all properly planned estates should include either a will or revocable living trust. The primary difference between a will and trust is that a Will requires probate and a Living Trust that holds title too all of the decedent’s property avoids probate.
While a will may be acceptable, if one of your most important goals in estate planning is to make the process of transferring your estate to your heirs a private matter and as easy and hassle free as possible, a living trust is generally the better choice.
What is a Durable Power of Attorney?
A Durable Power of Attorney authorizes one person (the agent or attorney in fact) to act on behalf or another (known as the principal) while the person is alive.
There are basically two types of powers of attorney. A “Limited” Power of Attorney authorizes the agent to act on behalf of the principal under limited or specific circumstances. A “General” Power of Attorney is very broad in scope and typically gives the agent the authority to make all financial decisions on behalf of the principal.
Either type of power of attorney can be made so that it is effective immediately upon signing it or effective at some later date, typically upon the determination by a physician that the principal is legally incapacitated.
What is a health care power of attorney?
A Health Care Power of Attorney authorizes a person (called the patient advocate) to exercise powers concerning medical related decisions. This includes the authority to withhold or withdraw life support or be placed under hospice care. It is very helpful that you first discuss your preferences about end of life measures with your family, when there is no crisis, rather than having them guess about what you would want. It is also good to have a clear understanding among all family members of your preferences in order to avoid lasting conflict.