While estate planning is a highly individualized process, there are a variety of documents that can be useful in most any estate plan. Do you know what these documents are and what the difference is? Here are some of the most frequently asked questions about estate planning documents and Daic Law’s easy-to-understand answers to get you started.
Q: What is a will?
A: A will is a document that establishes how property and assets will be distributed after death. A will is a legal document and may be revised or revoked at any time during the lifetime of the person making it.
Q: Why do I need a will?
A: A will establishes your wishes for how your assets are managed and distributed after death. Without a will, your property will be distributed based on the laws of your state, which may not reflect your desires, your desired beneficiaries, or safeguarding your assets.
Q: What is a trust?
A: A trust is a document that transfers property from one person (settlor) to another (trustee). The trustee manages the property covered in the trust for a third party, the beneficiary.
Q: Why do I need a trust?
A: A trust is essential for estate plans including minors, disabled, or irresponsible beneficiaries. You can set up a trust with a trustee that you trust to manage and distribute assets in a way that protects the asset and your beneficiary, and considers potential tax implications.
Q: What is a living will?
A: A living will, also commonly called an “advance directive” or advance medical directive”, is a set of document outlining how you want your healthcare to be managed in the event you cannot manage it yourself. A living will establishes your wishes should you become impaired, incompetent, incapacitated, or diagnosed with an end-stage medical condition (terminal illness).
Q: What is a power of attorney?
A: A power of attorney is a document signed by one person authorizing another person to act on his or her behalf. Most often, a power of attorney grants the second party, the attorney in fact or agent, authorization to manage financial or medical matters. There are several types of power of attorney that can be drafted depending on your individual needs and wishes.
Q: What documents or information do I need before talking to an attorney?
A: Before contacting an attorney, it is helpful to compile certain information and documents of your own. This will greatly aid in the process of understanding and completing the documents discussed above. The following may be particularly helpful in the estate planning process:
- A summary of how you would like your assets distributed.
- A detailed list of beneficiaries – include name, address, contact information, and relationship to you.
- Name(s) and contact information for any parties you would like to name as executor – or the person who will manage the estate and distribution during probate.
- A list of your assets and their value – include insurance policies, financial accounts, business assets, stocks, physical property, real estate, etc.
- Any existing estate planning documents (such as those listed above), child support orders, divorce decrees, or guardianship documents.
Q: Why do I need an “estate planning” attorney?
A: Working with an estate planning attorney is beneficial in many ways. Estate planning attorneys have knowledge, training, and experience that is specific to estate planning. This helps ensure that your legal rights are properly considered and upheld throughout the process.
To find out more about the benefits of working with an estate planning attorney, contact Daic Law to speak with our own estate planning attorney. Call our office at (713) 808-5246, or fill out our online form to learn more.