Estate Planning is a fancy name for the preparation of wills, trusts, and other documents related to the passage of title to property at death and management of property and health care decision-making prior to death.
Wills are the traditional method of transferring ownership of property at the time of death. Property generally can only be transferred by a document in writing or by court order. Obviously property owned by a deceased person cannot be transferred by a document in writing since the owner is no longer alive. The execution of a valid will enables a probate court to order the transfer to the persons named in the will. In order to be effective a will must be admitted to probate. Without a will property owned by a deceased person will be transferred by the probate court to the people specified in The Intestacy Statute.
Trusts, along with joint property are the primary methods of transferring ownership after death without the involvement of the probate court. Typically a trust is established by an individual during his lifetime by execution of a written trust agreement. The maker of the trust is usually the initial trustee. Since a trust is a separate entity, like a corporation, property owned by the trust is not treated as property of the maker even if the maker is the trustee. After the death of the maker the trust provides for a successor trustee who proceeds to distribute the property owned by the trust in accordance with the trust instructions of the maker. Trusts are also used in a variety of ways to avoid or lessen taxes which are imposed at the time of death.
Powers of Attorney
Powers of Attorney authorize someone to act for another during the maker’s lifetime. Powers of Attorney help avoid the need to go to probate court for the appointment of a conservator in the event the maker becomes legally incompetent prior to death. The person appointed is generally given broad powers to deal with the financial affairs of the maker.
Patient Advocate Appointment
Patient Advocate Appointments designate one or more people who are authorized to make health care decisions for the maker in the event the maker is unable to make those decisions for himself. Without such an Appointment it is difficult to terminate medical treatment in situations where the maker wishes to be allowed to die naturally. Appointments also usually contain medical directives spelling out the wishes of the maker concerning his terminal health care.