It is important to design your will to ensure that your assets go to your family members or other beneficiaries. Without a will, the court can distribute your property according to the laws of your state, which may not necessarily be aligned with your wishes. In addition to distributing your assets, a will can name an executor to manage your estate and name a guardian for any minor children. It is strongly recommended to draft a will with the expertise and assistance of an attorney familiar with your state’s laws to ensure the will is valid, enforceable under law, and works to achieve your goals.
A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. A trust can be created under your will to be effective upon death (testamentary trust) or during your lifetime to be effective immediately (inter vivos trust). Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.
Well-designed trusts can produce many advantages, including:
- minimizing taxes, court costs, and unnecessary legal fees
- protecting your assets in the event that your surviving spouse remarries
- assuring that your assets pass from generation to generation while being protected from divorce, lawsuits and other creditors
- giving children control of their inheritance at an age that you deem appropriate
- preserving disability benefits
- avoiding probate
Powers of Attorney
A power of attorney is a legal document that allows one person, “the principal”, to appoint another person, “the agent”, to act on his or her behalf in private affairs, business, or some other legal matter. A power of attorney may be general or limited. A general power of attorney is one that allows the agent to make all personal and business decisions. A limited power of attorney is one that is limited to a specified act. A power of attorney may also be durable or springing. A durable power of attorney takes effect immediately and continues until the principal’s death. A springing power of attorney is one that takes effect only after the incapacity of the principal or some other definite future act or circumstance.
Living Wills and Health Care Directives
An advance health care directive is a legal document in which a person specifies what actions should be taken for their health if they are no longer able to make decisions for themselves because of illness and incapacity. A living will is one form of advance directive in which an individual would provide instructions for his or her treatment. Another form of advance directive is a specific type of power of attorney or health care proxy, in which the person authorizes someone (an agent) to make decisions on their behalf when they are incapacitated. It is important to complete these documents to provide comprehensive guidance regarding medical care.