Understanding Common Estate Planning Documents and Options
If you have made the decision to visit with your family about estate planning issues during the holidays, you may feel unsure what legal options are available to your loved ones. Estate planning often involves more than just a Last Will and Testament and can include many different financial and legal tools to ensure your loved one’s wishes are fulfilled after they pass away. Understanding common estate planning documents and options can help you better have these conversations during this holiday season. It is important to note that not all of these estate planning documents listed below will be right for your family. Visiting with an experienced estate planning attorney at Ibekwe Law, PLLC at 512-505-2753 can help you better determine which documents may be more advantageous to your loved ones, given their unique set of facts and circumstances.
Last Will and Testament
A Last Will and Testament (will) determines how the assets (estate) of a decedent will be distributed, and appoints a person (executor) to administer and oversee the responsibilities involved with this distribution. A will must go through the probate process and be public information. A will only distributes assets after a person’s death, and can also name a guardian for any minor children. A will cannot be changed but can be destroyed and a new will can be created if a person’s wishes change at a later time.
Trusts are different legal instruments than wills, and allow a person to distribute their assets privately after their death and avoid probate court. Establishing a living trust can save a great deal of money and time after a person’s death. Avoiding probate court can save loved ones a great deal of stress and financial challenges after a person passes away. Unlike a will, there are several different types of trusts.
A revocable living trust establishes instructions regarding what happens to your estate while a person is alive, what happens when a person becomes mentally incapacitated, and what happens to a person’s estate after their death. These types of revocable trusts allow a person to alter or completely cancel the trust during the course of the person’s’ life that created it. During the time of the person’s life that created the trust, the person may receive a certain income, and after their death, the estate and assets may transfer to the beneficiaries.
As the name suggests, an irrevocable living trust can never be revoked during the life of the person that establishes it. An irrevocable living trust allows a person to transfer wealth, reduce taxation, and protect asses.
A testamentary trust takes effect upon the death of the person that created it, and is often part of a will.
Special Needs Trust
In some cases, if a family member has a special needs child that may need financial support and assistance throughout their life, even through adulthood, a person may consider creating a special needs trust. This type of trust is unique and offers some advantages for those persons who have a disability or special need that would require financial support throughout the duration of their life.
Durable Power of Attorney
In some cases, people worry about becoming incapacitated due to an illness or injury during their life. A will only allows for the distribution of assets after a person’s death and does not allow for a person to handle any responsibilities regarding an estate during the person’s life. The estate planning document known as a durable power of attorney, or financial power of attorney, will appoint a person (agent) to handle all financial affairs immediately or upon a triggering event—like incapacitation. A durable power of attorney can be in effect for a set period of time until the person recovers, or until the person dies.
Health Care Power of Attorney
Unlike a durable power of attorney, a health care power of attorney allows a person to appoint an agent to make medical decisions on their behalf in the event that they are unable to do so for themselves. The health care power of attorney agent can be different from the durable power of attorney agent. Just as a durable power of attorney, however, the health care power of attorney responsibilities will end when the person recovers from their injury or illness, or until the person dies.
An advance directive is an estate planning document that allows a person to state their healthcare-related preferences regarding the use of any extraordinary life-sustaining efforts that may be taken upon an injury or illness, or in the event of imminent death. A living will is a type of advance directive that tells exactly what your wishes are regarding health measures often in life-threatening circumstances. However, if you only want to have a do-not-resuscitate (DNR) or do-not-intubate (DNI) order, you may not need a full advance directive. Visiting with an experienced estate planning attorney at Ibekwe Law, PLLC can help you better understand what type of document you need regarding your health care wishes for emergency medical situations or terminal illnesses or injuries.
Contact an Experienced Estate Planning Attorney
If you are considering visiting with your family members regarding the subject of estate planning during the holidays, consider contacting an experienced estate planning attorney at Ibekwe Law, PLLC to help you understand common estate planning documents and the options available to your family members. We would welcome the opportunity to visit with you during this time to help you have this conversation and be better prepared. Contact us at 512-505-2753 or online at Ibekwe Law, PLLC today.