Understanding The Basics Of Creating An Estate Plan
Estate planning is a very intricate area of the law. There are many documents and court proceedings involved. Not following the rules could be very costly and frustrating. It is essential to seek legal advice for your specific situation before you make any decisions regarding your estate plan. Below are some of the basic concepts and definitions that you may want to become familiar with prior to meeting with your attorney.
- Will: A will is a legal document that allows you to communicate your wishes as to how, when and who will receive your personal property. A will can also appoint a guardian for minor children that are left without parents. A will does not avoid probate as probate is often determined by the value and type of assets that you own, regardless of the existence of a will.
- Intestacy: Intestacy describes the process in which the state decides how, when and who will receive your personal property. Intestacy is the process that is followed when you do not create a will or an estate plan and often includes probate.
- Probate: Probate is a judge-supervised court procedure that inventories your assets, pays off creditors and distributes what is left to your beneficiaries. In general, probate can be very expensive and time-consuming. Probate usually takes between nine months and two years to complete and requires fees to attorneys and the court. Time and money are two reasons why most people prefer to avoid probate.
- Living trust: A living trust is similar to a will in that it allows you to communicate how, when and who will receive your personal property. In addition to serving as a will, it becomes a mechanism that “holds” the title of your assets. Assets that are transferred into the name of a living trust while you are still alive will avoid the probate process. Upon your death, the assets can then pass to the beneficiaries that you designate in a more efficient and timely manner. You can even decide who should manage the trust during this process. The trust may be changed during your lifetime but becomes irrevocable at your death.
- Special needs trust: A special needs trust is a trust created for the purpose of preserving governmental benefits for disabled or aged beneficiaries. A well designed and administered special needs trust can provide funds to supplement a disabled or aged beneficiary’s governmental benefits without interfering with governmental aid. A special needs trust may be created during the lifetime of parents of a disabled person in their living trust that later becomes irrevocable at the death of the parent.
- A durable general power of attorney: A durable general power of attorney allows you to select someone, an “agent,” to manage your affairs and assets when you are no longer able or willing to do so. Care must always be taken to select an agent wisely because the agent under this power of attorney has very broad powers. A durable general power of attorney is usually employed along with estate plans because planning for incompetence is just as important as planning to transfer assets at death.
- An advance directive for health care: An advance directive for health care is a document that allows someone to name an agent to make health care decisions if the individual is incompetent and unable to make their own health care decisions. It allows the agent to consent to medical care, decline medical procedures, deal with issues regarding the termination of life support, consent to autopsy and organ donations, and make funeral and burial directions.
- Conservatorship: A conservatorship is a legal proceeding where one person (conservator) is appointed by a judge to manage the affairs of an incompetent person (conservatee).
Get Answers To Your Questions
You can learn more by contacting The Law Office of Theresa L. McConville. We can answer your questions and give you an idea of what to expect. Call us at 805-910-7905 or send us an email to schedule your first meeting. If you decide not to proceed after consulting with us about estate planning services, you will not be charged for the initial consultation. If you do elect to proceed, we handle estate planning matters on a reasonable flat-fee basis.