Wills and Revocable Living Trusts: What Does it All Mean?
Estate planning can be overwhelming, as it forces you to think about how you would like your assets distributed upon your death, plus other issues mentioned below. Of course, some people also put this off because they are confused by what it means to have a Will versus a Revocable Living Trust or other type of Trust, not to mention they are unknowing about the process of probate.
Some people assume that estate plans are only for the wealthy. Yet, most everyone should have an estate plan.
Consider creating an estate plan if you:
Here are the documents you should consider:
Durable Power of Attorney
A durable power of attorney is a legal document that grants another person the ability to make financial decisions for you in the event that you become incapacitated. Such decisions may include managing your assets and real property, selling investments to pay for medical bills, managing your insurance, and paying your bills.
The person you appoint as your medical health care representative is there to make sure you get the medical care and interventions that you want. This person will make medical decisions on your behalf when you are unable to, using your Advance Directive as a guide for determining the care you desire. Generally, a spouse, a parent, adult child or a trusted friend fills this role. Your Advance Directive also it also provides guidance for your loved ones regarding your preferences for end-of-life medical intervention, in case you can’t communicate for yourself.
Your Will is an important part of your estate plan. Your Will serves two primary
purposes. First, it outlines who will receive your assets after your death. If you have
minor children, it also designates who will be their guardian. Without a Will the determination of who receives your assets and property, as well as who will raise your minor child or children is out of your control.
You will also need to designate a Personal Representative. Your Personal Representative is the person who will oversee the management of your estate during the Probate of your estate, and will carry out the instructions of your Will. Your Personal Representative will take an inventory of your assets, and is tasked with selling your property, paying your debts, paying your taxes, and then distributing your assets and property as you stated in your Will.
Consider creating a Revocable Living Trust
There’s a common misconception that trusts are only for the very wealthy. However, trusts can play an important role in many estate plans. A Revocable Living Trust lets you retain control of the assets you place in the trust while you are alive, then transfers your assets to your beneficiaries after your death. Trusts give you more control as to how your assets are distributed, and allow you to keep the details of your assets out of court and the public eye.
In addition, trusts can also do the following:
- Minimize probate costs and protect your privacy
- Can reduce taxes owed by your estate and heirs
- Protect your assets from creditors and lawsuits
- Put conditions and time frames on how and when your assets are distributed
- Provides control over your assets as they pass to your heirs
- If you own a business and need to engage in business succession planning
If you do establish a trust, you will need to name a Trustee. The Trustee is responsible for making sure the trust does what it is intended to do. The Trustee’s responsibilities include managing the assets, ongoing administration and tax filings for the trust, as well as making distributions to beneficiaries according to the terms of the trust. By example, you may want your children to use the trust funds only for higher education. Your Trustee would make distributions from the trust in accordance with your directions stated in the trust.
Take Care of Your Estate Planning With an Experienced Estate Planning Lawyer
When you decide to take care of your estate planning, it is best to work with a lawyer who can draft your Will, Trust, Durable Power of Attorney, and Advance Directive, and provide you with confidence that everything in your estate plan is in order. Evans & Associates will provide you with 40+ years of experience helping people in the Willamette Valley and beyond with their estate planning needs so that your plan will work as you expect it to, protecting your assets and your family should anything ever happen to you.