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We offer a host of solutions for small
businesses and families when confronted with
troublesome legal issues. Here are some
frequently asked questions and our answers
regarding the practice areas where we focus our
expertise.
Estate Planning:
Wills, Trusts
What is a Living Trust?
Typically, a person who is
planning an estate thinks of drawing up
a set of instructions that will be used
after they have passed away by someone
who is trusted with following through
with the deceased person's plan.
While all estates are unique in some
way, in a typical estate plan there is a
will, a trust, a durable power of
attorney, and a healthcare
directive. A trust and will
typically address property issues where
a durable power of attorney and a
healthcare directive address issues
related to medical treatment and
decision making. When the two
types of instruments function together
correctly, families are spared the
difficulty that comes with uncertainty
in a time of crisis and emotional
upheaval.
What, then, is the difference between a
will and a trust?
When a will is drawn up, an executor,
with some supervision from the court,
actually fulfills the intent
memorialized in their will. With a
will, the executor kicks in to action
when the person who wrote the will dies
and subsequently causes title to
property to be transformed as well as
the distribution of specific personal
property.
In a trust, the person making the trust
actually transfers all of the assets to
the trust while they are still alive.
Typically, the person transferring the
property also makes themselves the
trustee for the trust until they
actually pass
away and the duty of being the trustee
transfers to an alternate trustee. Because title is still
vested in the person making the trust in
the first place, ownership of the
property never really changes until
death.
In spite of no real change in title, many benefits are realized:
• Transferring title and distributing
property becomes easy for the next
trustee because title has already
changed during the life of the deceased
person.
• Probate is not necessary because there
are no assets to administer since title
has already changed.
• The estate is spared excessive legal
fees because there is no probate
administration and no court supervised
process.
• The heirs of the deceased person have
the peace of mind that comes with not
having to get involved with cumbersome
legal maneuvering after the death of a
loved one.
• Tax planning can be done prior to
death insuring maximum use of available
tax breaks for the estate.
What then about healthcare directives
and durable powers of attorney?
Durable powers of attorney are used when
a person is incapacitated and unable to
make critical end of life decisions.
These are particularly useful when an
estate has not been planned in advance
because the holder of the durable power
of attorney can create trusts and do
some tax planning even though the person
being planned for may be disabled.
Healthcare directives, then, are just
that; an instrument that allows a person to
specify exactly what specific healthcare steps should or
should not be taken in situations where
the planner is incapacitated.
These can be highly detailed and require
doctors to follow the preordained
directions of the incapacitated party.
Feel free to Contact Us and see if we can help
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