Estates, Trusts, & Probate
What is Probate?
What is Probate?
Estate Planning is the process of organizing the control of your assets if you become incapacitated, or the distribution of your assets after your death.
Why should you have an Estate Plan?
Such a plan can be critical to:
Provide for and protect your loved ones.
Protect your assets.
Provide instructions for end of life care.
Get your affairs in order and to create a plan in case of death.
While unexpected events can arise at any time, proper planning can help to minimize the impact of those events and help you avoid leaving behind a disorderly and potentially disastrous situation.
There are many different types of "Estate Plans" ranging from complex Trusts to a straightforward Will.
Probate is the name for the court process wills must go through at our death before they are made effective. As with all court actions, the length and cost vary. It is not uncommon for the process to last from nine months to three years. In addition, a 3-5% administration fee can also be imposed.
A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children. To maximize the likelihood that your wishes are carried out, you want a written will that is signed by you and your witnesses.
Why do I need a Will?
Wills give you control. They let you decide how your belongings should be distributed and who should be the guardian of your minor children if you die.
What if I die without a Will?
If you die without a will, called "intestate," the state government will oversee the distribution of your assets and the care of your children.
What does a Will not cover?
While wills generally address the bulk of your assets, but a variety of items that are not covered by a will. These items include community property, proceeds from life insurance policy payouts, retirement assets, assets owned as joint tenants with rights of survivorship, and investment accounts that are designated as transfer on death.
How does a Will operate after my death?
An individual you designate, known as an "executor" or "personal representative" will be in charge of your estate. He or she will be responsible for gooing though the court process called Probate, during which he or she ensures that your assets are distributed according to your Will or state law.
A trust is an agreement that allows a trustee to hold assets on behalf of beneficiaries. Trusts are highly versatile and can protect assets and direct them into the right hands at the right time.
Advantages of a Trust?
Because trusts usually avoid probate, your trust beneficiaries can benefit from several advantages including faster access to your assets, the privacy of keeping the matter out of the courts, and the ability to avoid court fees.
Other, non-court related advantages to a trust include:
Providing for distribution over a period of time.
Controlling property that a will cannot, such as a life insurance policy or a retirement plan.
Providing protections to assets that a will cannot.
What is a Revocable Living Trust?
A Revocable Living Trust allows you leave instructions for your Trustee (often a family member or a bank) to care for you in life and your beneficiaries after death. Many people prefer Revocable Trust plans because they work without court intervention (unlike Wills, which must be Probated) and, therefore, can cost far less in administrative fees while keeping your affairs private. You can be your own Trustee while you are alive and have the capacity to do so.
What Happens if you become incapacitated and you have a trust?
In a Revocable Living Trust there is the initial Trustee (typically you the Settlor) as well as a list of back-up or successor Trustees who can take your place for financial decisions if you cannot do so, or do not with to do so. Typically the successor-trustee will be family member, friend, or professional trustee whom you trust with financial decisions. The successor trustee can come to power through the death, resignation or incapacity of the Settlor. This transition of power to the successor trustee is done without court involvement, unlike the certification of the Personal Representative for a Will.
A Medical Power of Attorney is a legal document where you name an agent to make medical decisions for you while you are incapacitated. This is only activated if it is determined that you do not have the mental ability to make a health care decision for yourself. That agent can then discuss your medical condition with the doctor and give permission for courses of treatment or procedures.
A Power of Attorney is a written document that grants an individual the authority to manage your affairs.
Do I need a Power of Attorney?
A Power of Attorney is primarily used to ensure that your directives and decisions are fulfilled if you become incapacitated. If you are not able to act on your behalf due to mental or physical incapacity, an agent may be needed to make financial decisions to ensure your well-being and care. These may include paying bills, selling assets to pay for medical expenses, and taking steps for the purposes of Medicaid planning.
An Advance Medical Directive (also known as a living will) allows you to document your wishes concerning medical treatments at the end of your life.
Through an Advance Medical Directive, you can provide specific instructions about the course of treatment healthcare providers must follow. In some cases, an Advance Medical Directive may forbid the use of various kinds of burdensome medical treatment.