Whether your situation calls for a revocable living trust or just a will depends on a variety of factors. A living trust may be useful if you are in a second marriage, have property in multiple states or want more control over your fiduciary’s actions. A trust operates both while you are living and after your death. A living trust has the added benefit of avoiding the cost and hassle involved in probate administration, plus it is generally easier for your fiduciaries to manage your assets as your Trustee rather than as your Agent under a financial power of attorney while you are living or as your Executor after your death.
Having a will or living trust is not the end of the estate planning discussion. There are two other essential documents everyone should have: Durable Power of Attorney (DPOA) and Health Care Power of Attorney (HCPOA). A DPOA is a critical document since it allows the named agent to manage the assets of the principal (the person giving the power of attorney). They can be used while you are competent, as a delegation of authority. They continue to be effective in the event of your incapacity (explaining why they are called “durable”). These documents should be carefully tailored to your individual circumstances since they often give broad powers and are not monitored by the courts. Agents typically operate under the “honor system”. Poorly drafted and misused DPOAs can easily become a license to steal. Moreover, acceptance of DPOAs by financial institutions is becoming more problematic. Without a DPOA, the likely outcome of your incapacity is a guardianship proceeding (even if you have a spouse) to give someone legal authority to act. Incompetency/guardianship is a lengthy, expensive court proceeding which sometimes fractures a family. It is highly recommended to address these issues now while you can, rather than leave your family in a ditch later.
While a DPOA usually deals only with financial matters, a HCPOA allows the named agent to make medical and residential decisions for you – but only after your incapacity. Having an agent who will advocate on your behalf for your wishes regarding end of life matters is the most important choice in completing a HCPOA. Pick your agent carefully. The form used for the HCPOA is not terribly important but the choice of agent is critical.
If you want to give a gift to your family you will make plans now for the certainties AND the uncertainties of later in life events. You gain peace of mind in the process. At Elder Law Carolina, we help you plan and draft all the documents you need to implement your plan, taking the time to understand your needs and wants and incorporating those into your plan.
A loved one has passed away and you are named as Executor in his or her will. What next steps do you take, and what are your responsibilities as Executor? Probate administration is a detail-oriented process that involves strict deadlines and a lot of specific documentation. As Executor, you must be qualified by the probate court to administer the estate, provide notice to creditors, prepare an inventory and final accounting of assets, and make distributions to the named beneficiaries in such a way as to satisfy the court and the beneficiaries.
Trust administration for a decedent, unlike probate, is not a court-supervised process. However, like an Executor, the Trustee is responsible for consolidating the assets, paying any debts, taxes, and expenses, and then distributing the assets to the beneficiaries. And although administering a trust is always easier than administering an estate via probate, there are still various rules and deadlines which the Trustee must deal with.
At Elder Law Carolina, we can assist in all aspects of probate and trust administration, easing the burden of managing a deceased’s affairs and protecting you from costly mistakes.