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Seniors express concern about what will happen if they are incapacitated, and how their property will be distributed to loved ones when they die. The language of trust and estate law can be confusing. What is the difference between a will and a living will? How is a power of attorney different from a living trust? This article answers some of these questions.
A will is a legal document which sets forth how the property you own at the time of your death is distributed to others. In a will, you can also designate who you desire that would serve as a guardian for your children. In order to distribute assets to your heirs, a will must normally go through a process involving the probate court. If you die without a will, the laws of intestate succession apply. In other words, the state will determine who will inherit from you by following a legal formula which may have nothing to do with your desires.
A living will is a legal document which expresses your desire not to be kept alive by life support systems if you become terminally ill. A living will may reduce the pain and suffering that you would otherwise endure if you become terminally ill and are unable to survive by your own organs, and it can act to reduce the amount of hospital bills which might liquidate the assets that you can share with your loved ones.
A living trust, also known as an active trust or a trust inter vivos, is a trust which becomes effective during the lifetime of the person setting up the trust, also known as the grantor. What occurs with a living trust is that a person selects another to serve as a trustee and directs that the trustee hold and distribute certain assets in a manner set up by the grantor in the living trust documents. You can put property into a living trust while you are alive, and when you die the property may automatically go to your heirs without having to go through probate court. Living trusts are revocable during your lifetime if you change your mind.
A power of attorney is a document which is signed before a notary which authorizes another person or persons to perform the acts which are set forth in the signed form. The person carrying out those tasks is called an attorney-in-fact. It is not necessary that the attorney-in-fact be a lawyer: you can assign another person the ability to perform acts which may have legal consequences to you.
Each person has a unique set of assets and the tax and probate consequences can vary depending upon your specific situation. Before creating a will, trust, or power of attorney, it may be wise to speak with an attorney and/or a CPA or other tax planner to determine the best way to effectuate your wishes as to who should manage your finances and how your assets should be distributed before or after you die. The law office of Pradell and Associates provides low cost legal consultations. A helpful staff provides prompt, courteous services to meet your legal needs. Give Pradell and Associates a call today, at (907) 279-4529-- (279-4LAW). This article is not intended to provide legal advice and should not be relied on for that purpose.