One of the most important things you can do, no matter what your age, is to establish a last Will and Testament, a Trust or designate Power of Attorney. Should something happen to you, these legal documents will ensure that things are handled just the way you want them to be, not the way someone else thinks is appropriate.
Wills, Trusts and Powers of Attorney are considered to be essential parts of Estate Planning law. Estate planning is a vital step toward making sure your final wishes are followed and that your loved ones are taken care of after you are gone. In order to understand these legal documents, you need to know some of the most important details and benefits of each one.
Last Will and Testament
To put it simply, a Will is a legal document that allows you to put your specific intentions in writing. In your will, you will clearly designate the following: Who inherits your assets (known as beneficiaries); and who you want to be in charge of dispersing of your assets (known as the estate administrator).
In the details of your Will, you can stipulate certain ways that your assets are handled. For example, if you want your grandchildren to reach a certain age before receiving an inheritance, you can put that detail in your Will.
Revocable Living Trust
One sure fire way to avoid a lengthy and bothersome probate process (the legal process of proving if a Will is valid) is to establish a Revocable Living Trust. This is simply a written agreement that designates who inherits your assets and names a specific person to manage those assets. This Trust is set up while you are living and, as long as you are mentally competent, you can change or revoke its contents at any time.
Power of Attorney
A Power of Attorney is a legal document that delegates authority from one person to another. If you suffer a mental or physical illness that leaves you unable to make medical decisions or manage your finances, a designated Power of Attorney will step in and make those decisions for you.
A Power of Attorney is only in effect while you are alive and not incapacitated. The most common form of Power of Attorney is “Durable.” The durable nature means that the authorized person can continue to make decisions on your behalf for as long as you are incapacitated. Decisions normally include managing your finances, paying your bills and directing your medical care.