You may not think that you have an “estate” because you don’t have property worth millions but regardless of how much you have or do not have you will have an estate upon your death – because that is the legal term for everything you own and everything you owe at the time of your death. By planning for what happens with your property after your death you can be more certain that your greedy brother-in-law does not try to get everything instead of the person you designate. Most people are most familiar with a Will – a written or otherwise documented record of how your property is to be distributed after your death along with who is in charge of the process.
Trusts&Wills
A trust is a legal document which creates an alter ego to yourself to ‘own’ and eventually pass on property you own . A trust can not only be useful to transfer property when you die but properly structured may help protect your property while you are still living. A Will is a legal document which documents a person’s wishes for what (s)he wants to happen with her property after death as well as who should be in charge of things after (s)he dies. Within reason a Will can be a quite simple one or two page document stating in effect “I leave everything to my spouse/child/sister/mother” or can be multiple pages with lists of specific instructions about who gets what property, which charity(ies) get what is left, how the children or family pet is to be taken care of. In short, a Will is a blank page that you can use to give instructions to others even after you’ve died. You may be wondering whether you need an attorney for something that you may think could be accomplished with an elaborate letter to your family. Well, because of the power of a Will as a final statement of instructions to the surviving family and friends, hundreds of years of legal decisions have instructed us what is and is not allowed in a Will, how it can be executed(signed), etc. If it is not done just so, lengthy and costly legal battles may result after you’ve passed away or, worse, your property may not go to the people you want it to .
Power of Attorney
A power of attorney is a legal document which delegates certain authority of a person to another person, usually a spouse, child or other family member. A power of attorney is often part of an Estate Plan because it can be used and is most useful when the person who grants the authority is incapable of making decisions herself. For example, if your parents are getting up in age and may begin to have declining memory and ability to make reasoned decisions, you would want to consider employing the use of a power of attorney to allow another adult close family member to pay bills, collect pension payments, etc. To avoid any confusion, the time for a power of attorney is well before it is needed. If your parent(s) are already declining you cannot just put a power of attorney in front of them to sign and you take over all of their financial affairs.