Estate planning is establishing legally binding arrangements (that fit your unique intentions) if you or others you care about die.
Keep in mind that comprehensive estate planning entails more than simply a will. Estate planning also often reduces prospective taxes and fees and establishes contingency plans to ensure that your desires about health care treatment are carried out afterward.
A comprehensive estate plan integrates what would happen with your house, investments, company, life insurance, employee benefits (such as a 401K plan), and other property in the event you become disabled or die.
On the personal side, a good estate plan includes instructions for carrying out your wishes regarding health care matters so that if you are ever unable to give the directions yourself, someone you choose will do so for you and will understand when you want them to authorize heroic measures and when you prefer they pull the plug.
Is it necessary for me to have a will?
No, but if you die without a will, your assets are allocated "intestate." This implies that your property will be transferred to your "heirs" (typically your spouse and children) according to a system established by each state. In each state, the word "heirs" may differ. In addition, each state may split property differently than you would prefer. As a result, having a valid will is critical.
What Happens If Someone Dies Without Leaving a Will?
If a person dies without a Will, he or she is said to have died intestate. The property will be allocated according to state legislation in this scenario. Typically, the surviving spouse receives half of the inheritance, with any children receiving the other half. If a person dies without a Will and without any trace of heirs, all property escheats (passes to the state).
When Should I Begin Making My Estate Plan?
You can only develop and implement an estate plan while alive and have the legal competence to engage in a contract. Suppose you cannot manage your own affairs or have another disability that affects your legal capacity. In that case, those who claim that you lacked ability at the time the documents were created or that you were subjected to fraud, coercion, or undue influence during the creation and implementation of your plan, may successfully challenge your estate plan.
What Kinds of Instructions Are Included in an Estate Plan?
An estate plan comprises one or more papers that provide instructions. Some documents are used to regulate health care decisions, and some to control your property if you become incapacitated. Yet, others prevent the transfer of your property if you die.
What About Estate Planning Books?
Caveat emptor when you begin the procedure (let the buyer beware). There is a lot of information out there, and although some of it is pretty good, some are, at best misleading. In bookshops, there are several general overview manuals regarding estate planning. Some are rather good, but the majority are dreadful. If you intend to do it yourself, be prepared to devote significant time to the task.
Estate Administration
Estate planning is the creation and finalization of property-related paperwork, which is often done with the assistance of an estate planning attorney. Wills, trusts, health care directives, and proxies are a few of the various facets of estate planning. A lawyer can explain the implications of each estate planning tool and advise you on the best course of action.
Estate planning is primarily concerned with dispersing property after your death. However, estate planning may also refer to how property is handled during your lifetime.
Wills and Testaments
The last will and testament is the foundation of many estate strategies. This agreement specifies how you want your property to be handled or inherited following your death. The testator is the individual who owns the will. Most states require the testator to be at least 18 years old and of sound mind while creating the will. An estate planning lawyer can listen to your wishes and prepare a final will and testament based on them.
You can choose an executor to administer your property after your death. This individual is in charge of following state rules regarding probate and property distribution. The executor carries out the instructions in the will, pays off creditors, and finally distributes the remaining property to your beneficiaries. You can also name a guardian for the young children of your choice.
If you desire to update your will, an estate planning attorney can produce an amendment that changes the provisions without needing a new document.
Trusts A lawyer can also assist you in establishing a trust. A trust is a vehicle that permits another person, known as the trustee, to handle assets on behalf of a beneficiary placed in the faith. You can function as the trustee of your own trust, depending on the sort of trust you form.
The trust agreement specifies when the trustee must make payments to the beneficiaries. This legal instrument is occasionally used alone or in conjunction with a will. Some states permit a testamentary trust that takes effect only after the testator dies. However, living trusts can be established to make monthly or one-time distributions, such as when the beneficiary reaches a specified age or graduates from college.
Power of Attorney
A power of attorney empowers one individual, the agent, to act on behalf of another, the principal. This legal agreement enables the agent to handle the principal's legal and financial concerns.
It can be broad, allowing an agent to exercise all legal rights on the principal's behalf. On the other hand, a power of attorney can only provide specific strengths, such as selling real estate.
You have control over when a power of attorney takes effect. A power of attorney might specify a time frame. Alternatively, it might take effect later at the time of an event that you select. A power of attorney must be defined as durable if it is to continue in force, even if you become incompetent.
Health Care Records
Many wills and estate planning agreements include medical information and requests. A health care power of attorney or health care proxy permits you to appoint someone else to make health care decisions on your behalf if the principal cannot do so.
This document defines the extent of the authority, such as saying that a power of attorney can access the principal's medical information and communicate with healthcare staff to make decisions on the principal's behalf.
A living will is a document that can be used in addition to a power of attorney. It permits you to offer instructions on the sort of life-sustaining care you should get if you are asleep for an extended time or are incompetent. These instructions include whether the principal will be fed and hydrated and whether breathing devices or feeding tubes will be used.
Speak with an Estate Planning Attorney Today
This post is meant to be both valuable and educational. Even common legal issues, however, may become complicated and frustrating. A competent estate planning attorney can handle your specific legal issues, explain the law, and represent you in court. Contact a local estate planning attorney immediately to explore your legal circumstances.
What Are Some Examples of Common Estate Planning Documents?
An estate plan encompasses much more than a will; it is a crucial component of any strategy. A properly-written estate plan will include every aspect of your estate and your desires for end-of-life care. Understanding all of the features will assist you in the beginning in considering the options you will need to make.
The following are some of the most commonly used estate planning documents:
Will: This document, often known as the last will and testament, passes your possessions to the individuals and organizations of your choice. You will also usually appoint a personal representative (or executor) to carry out your wishes and a guardian if you have small children.
A durable power of attorney for health care (or health care proxy): This designation designates someone to make healthcare choices for you if you are incapacitated by a severe sickness or injury and cannot convey your desires.
A living will (or direction to physicians): This document expresses your desires to doctors and hospitals regarding the sort of health care you would like to receive if you experience permanent incapacity, such as an irreversible coma.
A durable power of attorney for property: This appoints someone to manage financial concerns if you are unable or unwilling to do so. This includes things like paying payments and selling property.
This instrument holds legal title to your property and is used to manage it. You can appoint the person or people you wish as trustees to follow the trust's directions, including yourself. You can also set a replacement trustee to take your place.
A trust, unlike a will, usually takes effect immediately and continues after your death. Most trusts are revocable, meaning you may amend or cancel them. Trusts might also assist you in avoiding or limiting the notoriety that comes with probate.
Family limited partnership: Like a trust, this legal instrument can own and manage your property but also has additional tax planning benefits. These are beneficial for those with large estates who want to reduce federal and state estate taxes while protecting family members' assets.
An estate planning attorney can assist you in evaluating your options and developing a plan that protects your rights, wishes, and assets.
Durable Power of Attorney
A power of attorney (P.O.A.) is a legal instrument that must be signed before a notary public and permits a principal to appoint an agent as their attorney-in-fact. In other words, a power of attorney form allows you to delegate legal choices to another individual, such as a family member or loved one.
Because the attorney-in-fact is operating on behalf of the principal, he or she owes it to the principal to work in his or her best interests. In some uncomplicated circumstances, low-cost do-it-yourself (D.I.Y.) wills, living wills, and powers of attorney are attainable and may be found on our partner site, FindLaw.com. Estate law differs by state, and estate planning issues can rapidly get difficult.
You should also get guidance from an estate planning attorney in your region about your specific situation. In most circumstances, persons can designate anybody to act on their behalf, and either party can revoke the power of attorney designation at any time.
A power of attorney might include a language that specifies when and under what conditions a limited power of attorney will begin or terminate and to what degree (e.g., real estate, medical, financial power of attorney) an attorney-in-fact is permitted to operate in handling their principal's affairs. There are many forms of energy of attorney documents:
- Medical Durable Power of Attorney (Advance Health Care Directive or Living Will).
- Durable Power of Attorney for Property (Durable P.O.A. or Enduring P.O.A.).
- General Durable Power of Attorney
- Power of Attorney with Restrictions (Special Power of Attorney).
- Obtaining a Power of Attorney.
Each of these estate planning documents has various legal requirements, so it's critical that individuals understand what they imply and if they may be revoked (canceled) before signing anything. A general power of attorney begins operative immediately after execution but is terminated when the principal becomes incapable.
A durable or lasting power of attorney is likewise effective upon signing, but it can last beyond the principal's mental infirmity. A springing P.O.A. remains dormant once it is signed but becomes active when specific circumstances specified by the principal are met. A restricted P.O.A. is only valid for a particular period and specific purpose.
Similarly, a springing power of attorney is triggered when a specific event occurs. All powers of attorney are terminated upon the death of the principal. Every state has its own estate planning legislation. Talk to a local estate planning attorney who understands how to handle the power of attorney legal services and estate planning in your region to ensure you obtain the finest legal counsel for your case.
Differences Between Health Care Directives
Advanced health care directives, often known as living wills, authorize a trusted individual to make medical decisions on your behalf and to transmit those wishes to medical experts or a health care institution. When you are incapacitated or unable to convey your choices to your healthcare provider, the proxy or agent authority can make such decisions for you.
Depending on your state's regulations, a medical power of attorney may be used interchangeably with an advance health care directive or a living will. For example, under California Probate Code Section 4701, advance healthcare directives are recognized as a type of P.O.A. In contrast, Florida Code Section 765.201 et seq.
The Health Care Surrogate Act allows for healthcare instructions to be made in the context of life-prolonging medical operations. A medical power of attorney applies in some jurisdictions when the principal becomes incompetent but continues to live. In contrast, a healthcare directive or living will only apply in life-sustaining treatment, end-of-life care, and palliative care for terminal health conditions.
Durable Power of Attorney for Property
A durable power of attorney differs from a will because it is a more traditional estate planning instrument. In most cases, a durable power of attorney gives your fiduciary agent broad rights to act on your behalf if you become ill or suffer incapacity and cannot make financial choices or handle your financial affairs or real estate transactions.
This includes dealing with banking institutions on your behalf and managing your real estate. For example, the Texas Estates Code, EST 752.051, has a statutory durable power of attorney form that may be used for various legal purposes, such as managing one's money, property, and taxes. Because it is often hard to predict when this will happen, many people opt to execute the power of attorney form before any disease symptoms appear.
Advance care planning agreements are critical for making life decisions that you may not be able to make later in life. The primary distinction between a regular and an enduring (durable) power of attorney is one of terminology. To be legally binding, a durable power of attorney must expressly declare that it will take effect when or if the subject becomes disabled.
Some states may demand an additional document known as a self-proving affidavit. Probate courts may appoint a guardian or conservator to make critical decisions if you become incompetent and do not have a plan.
What Estate Planning Documents Are Required?
Estate planning may benefit everyone, regardless of estate size. For example, one person may have an extensive portfolio of valuable investments while another may just have a small bank account; nonetheless, both of these people will benefit from the power of attorney forms that provide for the care of their assets in the event of catastrophic sickness or incapacity.