Estate planning is the process by which an individual or family arranges the transfer of their assets in anticipation of death or incapacity. The process allows you to identify the family members and other loved ones that you wish to receive your property after your death. In addition, you can also minimize the amount of taxes that will need to be paid in order for your property to pass to others after your death.
A Will is a legal document declaring a person’s wishes regarding the disposal of their property when they die. It is submitted to the court and whomever you appoint as your executor distributes your assets as you have directed in your Will.
A Trust is a document that must be prepared according to certain legal procedures. A Grantor, the person creating the trust, transfers the title of his or her property to the name of the Trust. A Trustee, appointed by the Grantor, will manage the property until a specified event changes the Trustee. Generally the Grantor is the Trustee until death, therefore you maintaining control of the Trust assets. A Living Trust can be easily amended or changed as long as the Grantor is still alive and of sound mind and memory.
This document works like a normal will, but in this situation most of your assets of your estate are included in the trust; therefore this document will explain what happens to property that does not make it into the trust. For example, personal property such as clothing or a car may not make it into a trust. These simple personal items shall be distributed by this document.
A Durable Power of Attorney authorizes an agent (whom ever you choose) to transact business on your behalf. This authorization would only become effective upon your incapacitation or incompetence. A Durable Power of Attorney allows the agent to make financial decisions, pay your debts, and continue to meet your daily financial obligations.
A Power of Attorney for Healthcare authorizes an agent (whomever you choose) to transact healthcare decisions on your behalf. This authorization becomes effective upon your disability, incapacitation, or incompetence.