Once a decision has been made to engage in a formal estate plan, as opposed to letting the courts sort out who receives your property at your death, the decision essentially boils down to the following choices:
Will-based Estate Plans: A Will-based estate plan uses a Will to contain all of the instructions that the client wants to apply to their property at their death. In effect, a Will is dormant until death occurs, then its terms spring into being and a court supervised procedure, called probate, begins and ensures that the decedent’s last wishes are carried out. The terms of a Will progress though naming guardians for minor children, payment of last expenses, distribution of any specific bequests, the disposition of the decedent’s property, including changing the title of the property from the decedent to the beneficiaries and the power and responsibilities of the personal representative.
Trust-based Estate Plans: A trust based estate plan uses a revocable living trust to contain all of the instructions that the client wants to apply to their property during their lifetimes, their disability or illness and at their death. Unlike a Will, a living trust springs into life upon signing. It is an independent legal entity with rights and responsibilities of its own. The operations of a Trust are carried out by the Trustees for the sole benefit of the beneficiaries, both lifetime and after death. Unlike a Will, property is transferred from the Trust creator to the living trust immediately after signing the trust. The Trust becomes the legal owner of the property for both state and federal law purposes. When a disability or death occur, the Trust already owns the property and does not need the participation of the Probate Court for supervision. Typically, the Trust creator is also the Trustee. Upon the disability or death of the Trust creator, the terms of the Trust automatically transfer power and responsibility to the successor Trustee who is the person or persons the Trust creator has chosen to continue the management of the Trust assets.
ADDITIONAL DECISION MAKING DOCUMENTS
Financial Durable Power of Attorney. A Financial Durable Power of Attorney is a document that appoints a person to serve as the agent of the creator. The Financial Durable Power of Attorney is an extremely important document that should be given very careful consideration. It will provide authority to the agent to carry out all of your personal and business matters should you become unable to make decisions for yourself. The Financial Power of Attorney is a set of instructions that enables the agent to make needed decisions that come along without Court involvement. The Financial Durable Power of Attorney is imperative to provide for wealth preservation during Medicaid or Veteran Benefits planning.
Living Will/Healthcare Power of Attorney. A Living Will/Healthcare Power of Attorney is an end of life directive, empowering your agent to make healthcare decisions, including the authority to cease life sustaining care when you are either in a terminal condition or permanently unconscious.
HIPAA Authorization. Federal laws have been enacted to protect our privacy in medical matters. A HIPAA Authorization is a release of information document that grants access to medical records and information. This is an important document to assure that your Financial Power of Attorney and Healthcare Power of Attorney have access to all the information necessary to make a fully informed decision about your care.