Estate Planning
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:
- Want to minimize or illuminate probate costs and protect your privacy
- Want to find ways to save on taxes and the Oregon death tax
- Own a business and need to engage in business succession planning
- Want to ensure that you provide for your heirs, including children and grandchildren and your surviving spouse
- Want to control the disposition of your assets after your passing
- Want to address who will be the guardian of your minor children if you pass away
- Want to direct for your loved ones how they should approach your medical decisions if you are incapacitated.
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.
Advance Directive
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.
Will
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