For a good and effective estate plan, one may need to have both a will, trust and power of attorney as these documents serve different definite purposes. Depending on the estate, some people only use wills in settling their estates, some trusts, while a significant number use both living trust, Wills and power of attorney. A good estate plan should be one that covers both expected and unexpected events, and as such, there may be a need to combine both. For creation of Wills and Trusts contact a qualified and well experienced estate planning lawyer.
At the event of death, your will is admitted to court for probate proceedings. Probate proceeding involves different steps which for instance include your named executor settling your debts, taxes etc. If you are a person whose assets are much and are in different places, probate might even take longer and cost more. Also during probate lots of challenges are encountered like the challenge of will contest, insufficient fund to settle creditors, the named executor might even reject this role. But you can make things easy by passing your assets in a living trust. With a living trust, your assets pass to the beneficiaries directly and immediately without passing through probate.
A living trust is a legal agreement between the trust creator (grantor) and a trustee for the trustee to manage the trust assets on behalf of the beneficiary. The grantor funds’ assets into the living trusts by retitling the assets in the name of the trust. In that case, the trust becomes the owner. The grantor can name himself as the trustee and use the assets to his own benefit. He must, however, name a successor trustee who will manage the trust assets according to his laid out terms when he becomes incapacitated or deceased.
A will is a detailed and basic estate planning document which contains necessary information on how you want your estate to be managed as well as the beneficiaries of your estate in the case of death. In writing a will, there are a whole lot of things you will need to put into consideration. It goes beyond just allocating whose getting what. There are many ways you can write a will but if you are in Buffalo, you should write your will in accordance with New York’s law. If your estate is a complex one or you wish to avoid probate either because of cost or because of any other reason, it would be best if you contact an estate planning lawyer near you.
Power of attorney
A power of attorney (POA) is a document in which you appoint another person to act and make decisions on your behalf. In such a setting, you are called the principal while the agent you appoint is called an attorney-in-fact) A power of attorney sometimes is also used to refer to the attorney-in-fact. The power of attorney document authorizes the agent over a broad or limited jurisdiction as set out by the principal. They can be authorized to either make financial decisions, health care decisions, both, or even handle the personal and domestic care of the principal as the case may be.
Difference between a trust and a will
While a will and trust both can be used for the disposition of assets, one major difference between the two is that a will does so only after the death of the “testator” (the testator is the creator of the will); while on the other hand, a trust may be used to dispose assets before or after the “trustor’s” death. The trustor is the creator of the trust, as opposed to a testator.
Another major difference between Wills and Trusts is probate. For a will to take effect after the testator’s death, it must first be probated in a Surrogate’s Court. This legal procedure is for determining the validity of the will i.e. if it was written in accordance with the law. This process can be quite lengthy and expensive as there will be court fees and attorney fees to be paid by the executor of the will. Should the will pass as invalid, or in the complete absence of a will, the court takes authority over how the estate will be disposed.
On the other hand, a trust is completely probate free. Trusts pass outside of probate, thus saving a lot of time and cost. Assets are transferred to the beneficiary privately without the publicity of the court. This is one major reason why some persons create trusts rather than wills.
Contact an Estate planning lawyer
There are state laws and requirements binding the validity of your living trust, will and power of attorney document. To ensure your document complies with state laws and that your POA is the type befitting your situation, contact our estate planning lawyer today.