The Center for Elder Law Solutions

 Our Expertise:
Estate Planning & Shelters
Long term care - Advanced directives
- Powers of attorney
- Wills
- Trusts

Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence. Though often overlooked or put off in favor of more immediate concerns, a comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies: What is the state of their financial affairs? What real and personal property do they own? Who gets what? Does a personal guardian need to be appointed to care for minor children? How much tax will need to be paid in order to transfer property ownership? What funeral arrangements are appropriate?

What is an "Estate"?

Your "estate" consists of all property owned by you at the time of your death, including:
  • Real estate
  • Bank accounts
  • Stocks and other securities
  • Life insurance policies
  • Personal property such as automobiles, jewelry, and artwork

How Can an Estate Plan Help?

Regardless of your age, or the size and complexity of your estate, an estate plan can accomplish the following:
  • Identify the family members and other loved ones that you wish to receive your property after your death
  • Ensure that your property will be transferred to those you have identified, as quickly and with as few legal hurdles as possible
  • Minimize the amount of taxes that will need to be paid in order for your property to pass to others after your death
  • Avoid the time and costs associated with the probate process by utilizing estate planning devices like living trusts and "payable on death" bank accounts
  • Dictate the kinds of life-prolonging medical care you wish to receive should you be unable to make your wishes known when the time comes
  • Set forth the kind of funeral arrangements you would like, and how related expenses are to be paid

An advance directive tells your doctor what kind of care you would like to have if you become unable to make medical decisions (if you are in a coma, for example). If you are admitted to the hospital, the hospital staff will probably talk to you about advance directives.

A good advance directive describes the kind of treatment you would want depending on how sick you are. For example, the directives would describe what kind of care you want if you have an illness that you are unlikely to recover from, or if you are permanently unconscious. Advance directives usually tell your doctor that you don't want certain kinds of treatment. However, they can also say that you want a certain treatment no matter how ill you are.

Advance directives can take many forms. Laws about advance directives are different in each state. You should be aware of the laws in your state.

A power of attorney is a legal document that gives someone you choose the power to act in your place. In case you ever become mentally incapacitated, you’ll need what are known as “durable” powers of attorney for medical care and finances. A durable power of attorney simply means that the document stays in effect if you become incapacitated and unable to handle matters on your own. (Ordinary, or “nondurable,” powers of attorney automatically end if the person who makes them loses mental capacity.)

With a valid power of attorney, the trusted person you name will be legally permitted to take care of important matters for you -- for example, paying your bills, managing your investments, or directing your medical care -- if you are unable to do so yourself.

Taking the time to make these documents is well worth the small effort it will take. If you haven’t made durable powers of attorney and something happens to you, your loved ones may have to go to court to get the authority to handle your affairs.

To cover all of the issues that matter to you, you’ll probably need two separate documents: one that addresses health care issues and another to take care of your finances.

A will is a document containing your instructions and wishes as to how your property and assets are to be distributed after your death. Any person, of any age, should seriously consider a will at the earliest. A will should not only be for people who have reached an age where death is not far away. People die at all ages and a will is needed especially if you have assets and property to be allocated to those you wish to benefit.

A will is the expression of the person's wishes concerning how their property is to be distributed. It is a written statement, signed in compliance with the various formalities covered by legislation. It is a legal document containing the names of the people you want to benefit, as well as details of your possessions at the date of your death. The people you want to benefit are called beneficiaries.

Your property or possessions will include everything you own, such as your home, land, vehicles, bank accounts, benefits of insurance policies, furniture, boat, investments such as shares, personal jewelry, artwork, and so on. A will is the only way you can ensure your assets will be distributed according to your wishes after your death.

A Trust is a legal entity that can hold title to property for the benefit of one or more other persons or entities. The person who sets up the trust is called the Creator (also known as the Grantor, Trustor, Donor, or Settlor).

The person or entity that controls the Trust and is responsible for managing the Trust assets is called the Trustee. The Trustee holds the legal title, but not the full title, to the property that is in the Trust. This means that the Trustee can only use the assets and proceeds from the Trust property for the benefit of the people the Trust is set up to benefit, never for his or her own profit.

The persons who are intended to benefit from the Trust are known as Beneficiaries. Beneficiaries own what is called the equitable title to the property held by the Trust. This means that they have a right to have the assets used for their benefit in the way directed by the Trust provisions.

These parties to the Trust need not be different people. It’s possible in most states to be all 3 at once. Historically courts concluded that there was no need for a Trust when the Trustee was also the Beneficiary. (The legal and equitable titles were said to have "merged.") However, now, in most states, if it is done right, a Trust Creator may establish a revocable Trust, serve as the initial Trustee and be able to obtain immediate benefits as a Beneficiary from Trust property.

The property that is transferred to a Trust becomes the Trust estate (also called the Trust corpus, Trust res, or Trust principal). A Trust estate consists of all of the property, rights, and obligations that are transferred to the Trust.

The Trust estate is managed in accordance with the terms and conditions of the document creating the Trust, which is called the Trust agreement or declaration of Trust. This document sets out the purpose of the Trust, the identities and powers of the Trustees, the names of the Beneficiaries, how the Trust assets should be managed, and how they should be distributed to Beneficiaries.

Trusts can be “inter vivos,” (set up during the Grantor’s lifetime). This means that the Trust comes into being and functions while the Grantor is still alive. A Testamentary Trust is set up by a Will and does not come into being or begin to function until after the death of the Grantor.

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