I leave everything to ??? Wills, Trusts, Estates and Confusion.
The subject of Wills, Living Wills, Irrevocable Trusts, Revocable Trusts, Life time Trusts, Testamentary Trusts, Powers of Attorney and Estates need not be as confusing as it seems. They are merely tools and regardless of your station in life or the vastness of your financial estate, several of these tools very probably apply to you.
When you make the appointment with your lawyer, he will elicit the information necessary to determine which of the above apply to your situation. At the very least, he may recommend a Simple Will, a Living Will and a Power of Attorney.
The Simple Will allows you to dispose of your property in the manner in which you see fit. It allows you to provide for the payment of your bills, funeral expenses and taxes. You can designate the person who you want to care for these matters and carry out your wishes as set forth in your will. In planing for your will you may be able to avoid certain taxes by the creation of joint accounts.
A Living Will is your expression of your wishes concerning your care and treatment during your final days on this earth. We all know that we may face incapacity and the inability to care for ourselves due to the onset of age or accident or illness. Others, even those we love and rely on, may not share our view about life and death; or their judgment may be blinded by compassion and love. A living will states what you want, and relieves others of the burden of making those hard decisions when and if the time should come.
A Power of Attorney grants to another whom you trust, the ability to perform the same acts which you can perform even during periods when you are incapacitated or determined to be incompetent. A Durable Power of Attorney grants to another whom you trust the ability to perform the same acts which you can perform. A durable power of attorney can save great expense and time in the event of the incapacity of an individual. It avoids the necessity of going to court and having an individual declared legally incompetent, inventorying his estate, having a guardian appointed and filing the necessary accounting. This document may be the most powerful and the most useful for anyone involved in estate planning.
A Trust is an instrument which allows a person to convey legal ownership of assets for the benefit of himself or others. A Revocable Trust is one that can be revoked, i.e. , the assets can be transferred back to the original Settlor (grantor) at the original settlor's wish. An Irrevocable Trust is one in which the assets can not be returned to the settlor just because he wants them returned. Both may be effective tools in providing for spouses, minor children or incapacitated persons. They may also have important tax consequence to the settlor's estate upon his death. A trust which is created by a will is known as a Testamentary Trust. A trust which is created and takes effect during a persons life time is a Living Trust. Both may be either revocable or irrevocable, and your attorney can guide you as to which best meets your needs.
When a person dies, the sum of his assets and his liabilities comprise his Estate. If he leaves a will, he dies Testate, and the terms of his will determine how his assets will be distributed; if he has no will, he dies Intestate, and the state laws of intestate distribution determine how his assets will be divided. Sometimes it is necessary to open an estate; in the case of a testacy, you enter the will for probate by filing it with the Register of Wills office. In the case of intestacy, you file for letters of administration with the Register of Wills. A personal representative (An Executor in the case of a will and an Administrator where there is no will) is then appointed to file the necessary tax returns, pay the funeral expense, pay all final bills and then make distribution to the beneficiaries or heirs. In most cases all expenses charged against the administration of the estate are charged against and paid for by the estate. Some assets may pass outside of the estate. These are joint survivorship assets and have different tax consequences. Many times lawyers recommend the use of Joint Survivorship Assets such as joint bank accounts, joint names on stock certificates or joint real estate in order to eliminate administrative costs and inheritance taxes. Often, the savings derived from good estate planning greatly exceed the expense incurred by failing to plan ahead.
This information is presented as a service of Kahle & Associates, Attorneys at Law
Created by Warner Computer Services of Bradford, PA