What is estate planning?
Estate planning is a process in which individuals and couples decide how to manage their assets during their lives, or the life of a surviving spouse, plan for their own care if they become incapacitated or disabled, and for the orderly transfer of their assets to their chosen heirs.
Some typical types of estate planning documents, that may also have associated documents:
- Last Will and Testament
- Health Care Directive or Durable Power of Attorney For Health Care Decisions
- General Durable Power of Attorney
- Revocable or Living Trust (though Trusts can be irrevocable for special reasons)
What is a Last Will and Testament (Will)?
A Will generally is a set of instructions to the court that allows you to specify how your assets are to be distributed to your designated heirs. A Last Will and Testament does not avoid probate through state court, but allows the administration of the estate by the court to move forward with greater ease and efficiency.
What is Probate?
Generally Probate refers to how an individual’s assets are transferred to their heirs after their death through a civil action with the Probate Court. Unless you have established a non-probate transfer process through your estate plan, there will often be a required court managed process and associated expenses to distribute your assets.
What is a Revocable Living Trust?
A Revocable Living Trust or inter vivos trust, lets you control the management of your assets while you are alive and specify the distribution of your estate to your heirs after your death – often without court involvement!
A Trust often results in lower costs to distribute your assets to your family, a shorter amount of time for distribution of assets to your heirs, and privacy concerning your estate plan for the distribution of your assets to your designated heirs.
Power of Attorney
There are two common types of Powers of Attorney that the typical individual or couple should consider:
- A Healthcare Directive or Durable Power of Attorney For Health Care Decisions
- Durable General Power of Attorney
Conservatorships and Court Management?
If you do not plan appropriately in advance, and become incapacitated, a court-supervised conservatorship proceeding may be required. Court administration of your assets require annual filings to the court, and is often much more cumbersome and expensive than administration through a Trust.