DO I NEED A LIVING TRUST OR A WILL?
A will specifies who will receive a person's property when they die, and who will distribute it. The will can nominate who will take care of minor children if both parents die, and who will take care of the children=s money. If a person dies without a will the law has a default plan for who will receive their property (spouse, then children, then parents, etc).
Many people have a revocable living trust prepared as part of their estate plan. Like a will, the living trust provides for the distribution of property, but it also avoids probate. Probate is necessary to transfer property of a deceased person if they owned real property that was not in trust or joint tenancy, or if they had assets of more than $150,000 that didn=t have beneficiaries or a joint owner. Some more complex trusts are used for avoiding estate taxes for persons with large estates. Also, a Special Needs Trust can be prepared to protect the assets of a beneficiary receiving SSI or other public benefits.
POWERS OF ATTORNEY
Other common documents that are prepared as part of an estate plan are an Advanced Health Care Directive and a Springing Power of Attorney for Finances. In the Advanced Health Care Directive you specify your health care desires and who would make health care decisions for you if you cannot. The special Springing Power of Attorney for finances only takes effect if you are incompetent. It can be helpful if you have a stroke or dementia at some point in your life so that someone can pay your bills and manage your finances without having to be appointed as your Conservator.
If you are planning to prepare a will or trust, the main preparation is to give some thought to the questions that the attorney will ask you, such as:
1) Who do you want to do the job of distributing your property after you (and your spouse/partner if you have one) are gone (selling property if needed, paying your last bills, etc.) You may also want an alternate for the trustee of your trust or executor of your will.
2) Who do you want to receive your property when you and your spouse/partner are gone, plus alternates?
3) If you have minor children, who will take care of them personally, and who will take charge of their money if both parents are gone? When do you want them to receive their money,
and do you want to put any special conditions, such as an incentive for college graduation?