Knowing these four key estate planning terms can help you to make better and more educated decisions regarding the future of your loved ones and how to best protect your legacy.
Most of us know that a Will is a legally enforceable declaration of how you would like your property to be distributed after death. It may also contain provisions for naming a guardian for your minor children, if you were to pre-decease them. A key point to keep in mind with a will is: it becomes legally effective and operative upon death. Accordingly, if you would like to give directions during your lifetime, for example, for health care decisions, then you must also have a Living Will, which is a separate legal document.
Probate means “to prove,” and is the post-death court proceedings used to implement the provisions of your will. You will not be around for the probate of your own estate. Probate is also the forum where creditors may file claims to collect their debts and where parties may contest a will. Probate takes place publicly, and is sometimes, but not always, an expensive and time-consuming process.
3. Power of Attorney
Generally, a power of attorney is a written authorization giving someone else the authority to represent you or act on your behalf in private affairs, business or other legal matters. Specifically, a health care power of attorney is a document in which you name another person to make health care decisions for you if you are to become incapacitated.
A trust is a legal document where you, the “trustor” or “grantor,” transfers some or all of your property to a trustee, who in turn holds that property for the beneficiaries you name in the trust. The trustee may be yourself, your spouse or any another named person or corporate fiduciary. Just make sure it is someone you trust to be reasonable and prudent. One of the major differences between a trust and a will is, the trust takes effect immediately upon its creation and funding. Also, property placed in trust will typically avoid probate.
For assistance with your wills or trusts, or with any other legal needs related to your business or estate planning, contact Fournier Legal Services at email@example.com or 860.670.3535 now for a free consultation and planning session.