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Estate Planning - FAQS

1.  What is "Estate Planning"? 

  • legal documents created by you in advance of disability or incapacitation and death
  • planning for the future
  • instructions to your survivors-heirs and beneficiaries
  • one of the most important steps that you can take in life
  • a gift from you to you and the people you love
  • Stewardship


2.  What is an "Estate"?

Your estate consists of everything you own at any point in life and at death, regardless of size or value, ie., motorized vehicles, real estate, financial accounts, stocks and bonds, life insurance, retirement plans, antiques, artwork, furniture, businesses, and other investments.



3. Why make an Estate Plan?

It is not for just the rich. Virtually every competent adult should make an Estate Plan (Plan) to protect their estate (assets), themselves, and their loved ones should they become disabled or incapacitated, and when they die.   Moreover, you brought nothing into this world - i.e.,  cars, bank accounts, personal property, real estate, etc. - and you won't be taking them with you when you die. Therefore, you need a formal "plan"  to distribute your assets when you depart this life;  to protect you should you become disable or incapacitated; and, to  protect the rights of your beneficiaries if you become disabled or incapacitated and when you die.  Also, it can avoid probate, guardianship, serve to minimize the family confusion, disputes, and discord that generally occurs when there are no written instructions to loved ones about who is in charge, who is to receive what, etc.


2. What is Probate?  

Probate should be avoided, when and if possible.  It is a court supervised process for the final disposition of a person's assets.  Many people pass away "intestate," meaning without a will. In those cases, the probate court appoints someone to decide how to distribute their cash, assets, and other property. And, even those with a will come under probate court jurisdiction.


3.   What is a "Will"?

It is a legal document that designates  someone (Executor) to manage your estate when you die;  appoints someone (Guardian) to care for a minor child, if any, if both you and the other parent are deceased; and, instruct  the court and world about how your possessions are to be distributed after your death. However, it does not avoid the slow and expensive probate process.  Moreover, if you die without one (will), someone other than you will make those important decision for you, i.e., state laws, probate court.


4.  What is a "Revocable Living Trust (RLT)"?

A revocable living trust (rlt) is an alternative to a will and is valid in all 50 states, including, the District of Columbia.  It's major advantage is the ability to avoid the lengthy and expensive process of probate, and especially if you own real estate in more than one states.  Generally, you appoint yourself as the trustee and transfer your possessions to it during your lifetime for your benefit.  After your death, ownership of your property is passed on by your successor trustee to your beneficiaries, generally, without the need for lawyer's fees or court filings. And, unlike a will which proceedings are public, the terms of a revocable living trust can be kept completely private. The  exception however, is where you choose not to transfer certain property into the RLT .  In that cases, you will need a will to assign those specific possessions to the beneficiaries you designate.


After creating  a RLT you will need to fund it  - make sure that you title assets in the trust's name. Once  funded, it will continue on until you revoke it or it is distributed under its terms. Nevertheless, many people do not “fund” their living trust.  But, establishing a RLT and then failing to fund it is a waste of time and money, leaving your assets exposed to expensive and lengthy probate.


If you are not sure whether you should make a "will' or "RLT",  we will discuss the benefit of doth during your consultation;and, based on your particular circumstances we can assist you with making the right decision.


5.  What is a "Power of Attorney"?
The power of attorney is a legal document that appoints another ( Agent or Attorney-in-fact) to make decision for you if you are unable to do so because of disability or incapacitation.  It can avoid the expensive and length court proceedings of guardianship.

There are two basic types:
A.  Durable Financial Power of Attorney:  
The durable financial power of attorney is simply a way to allow someone else to manage your finances in the event that you become incapacitated and are unable to make those decisions yourself. The power is granted in a document, and is not only useful for you, but can really help your family in times of crisis. More precisely, it grants someone legal authority to act on your behalf for financial issues.  You can set the limits of your agent's power, granting as much or as little power as you think is appropriate. However, when deciding whether to set limits, consider the kind of tasks your agent will likely be asked to perform, i.e. paying your bills, accessing your financial accounts, investing , collecting retirement benefits, transferring and selling assets, buying insurance, operating a small business, hiring someone to represent you, etc.

Your agent cannot do whatever he or she wants to do, but must act in your best interests.  One area of potential conflict to keep in mind is in regards to paying for medical expenses. Often, people also name a medical agent who can make medical decisions for them. If your financial and medical agent aren't the same person or disagree on medical care, the financial agent can make receiving medical care difficult.


B. Durable Medical Power of Attorney

A medical power of attorney is a legal document that names one person the health care agent of another person. The agent has the ability to make health care decisions and the responsibility to make sure doctors and other medical personnel provide necessary and appropriate care according to the patient’s wishes. This includes end-of-life care.

6.  What is a "Living Will"

A living will, also known as an advanced healthcare directive to physicians, is a legal directive that allows you to state in advance of healthcare issues  your wishes about your end of life care. It is used in the event you are unable to communicate with loved ones or physicians concerning such care. Moreover, it enables you to issue "do not resuscitate (DNR)" orders to physicians in circumstances where the physician believes there is no hope that you can ever return to independent living; and, to inform caregivers that you want your physician to administer palliative care (to ease pain and suffering) in cases where you cannot communicate that to a physician.


7. What are somethings to consider when making an "Estate Plan":

  • Who will be the Personal Representative of your Last Will?
  • Who will be the Successor Trustee after you, if you draft a trust?
  • Who should be the Guardian of a minor child?
  • Who will make financial decisions for you if you cannot make them yourself?
  • Who will make healthcare decisions for you if you cannot make them yourself?
  • How you want end- of-life medical care handled?
  • Do you want to make any anatomical gifts at your death?
  • How you want your estate distributed at your death?