ESTATE PLANNING Frequently Asked questions
A will allows you to determine how your property will be distributed at your death. If you are married or have children, a simple will allows you to determine how much of your property will pass to your spouse and how much will pass to your children.If you have children who are minors, a will allows you to appoint a guardian for your children. A will also allows you to set up a trust to manage the assets that you leave to your children. In addition, a will can control the manner in which your children receive the assets (e.g., lump sum at age 18, installments, etc.).A will is especially important when you have children from a prior marriage. It is not unusual for a large portion of your property to pass outright to your current spouse. However, your spouse is then under no obligation to include your children in his or her will. A will can ensure that children from a prior marriage are provided for.Even if you already have a will, you should have it reviewed in the event of changes in your family situation (e.g., birth, death, divorce or marriage) or financial situation.
What is a living trust?
A revocable inter vivos trust, also known as a “living trust,” is a trust that is set up by you during your lifetime. It can be amended or revoked by you at any time. A living trust can allow you to avoid the expensive and time-consuming process of probate. It can also allow the disposition of your estate to remain a private matter, unlike a will, which becomes a public document when filed with the Probate Court.
However, a living trust does require that you comply with various requirements, including transferring title to your assets into the name of the living trust. An estate planning attorney can assist you in drafting and implementing a living trust.
Will a living trust allow me to avoid probate?
A living trust will allow you to avoid probate if all of your assets have been properly transferred to the trust and other formalities have been complied with. In some cases, avoiding probate can save money to your heirs, although like a will, living trusts do require administration upon your death. For example, it is necessary to notify the beneficiaries of the terms of the trust upon request. Often, an optional procedure to notify creditors of your death is employed in order to shorten the period in which they can file claims against your trust. Estate tax returns need to be filed to the same extent as with a probate estate. Finally, assets of the trust need to be appraised and a trust accounting needs to be prepared and sent to the beneficiaries, similar to the probate accounting that would be prepared if you died with a will.
In cases where the trust assets are significant or there is family disharmony, it may be advisable to subject the trust administration to probate court oversight. The advantage is that the Probate Court can issue final orders that are binding on the parties. One disadvantage to Probate Court oversight is that it does cause the trust administration to become a public record, although this is often unavoidable.
What is a durable power of attorney?
A “durable power of attorney” allows you to appoint an agent to make decisions on your behalf in the event you are disabled or incapacitated. With one type of durable power of attorney, the agent can make health care decisions for you. With another, the agent can take care of your investments and tax matters. A durable power of attorney can often eliminate the need for a court–supervised conservatorship, which is costly, time consuming and public.
How do I direct my doctors to terminate life support?
An Advance Health Care Directive allows you to inform doctors and other parties of your desire to terminate life support in the event that there is no reasonable hope of recovery.