Like a puzzle, every part of estate planning connects to each other, but if you don't know how they fit, you won't see the bigger picture. To explain how the pieces link together, here are the answers to some common questions about estate planning.
1. What is estate planning?
Essentially, estate planning covers your final wishes, including the transfer of property at death. It can also involve tax planning. It may require the services of not just an attorney, but an accountant, a financial planner, a life insurance advisor, a banker, or a broker. People often associate estate planning with just a will, but many estate plans include a power of attorney, an advance directive for healthcare, and a trust. Experienced estate planning attorneys, like the team at Levey, Wagley, Putman & Eccher, P.A., can listen to your concerns and guide you through your estate plan.
2. How does elder law differ from general law practice?
Elder law specializes in serving older adults, the disabled, and their families. It doesn't just focus on crucial financial and estate planning needs. It can also involve issues such as elder abuse, retirement, and healthcare.
3. What are a will, a power of attorney, an advance directive for healthcare, and a trust?
Each document plays a different role in estate planning at a certain time. A will concerns a person's estate and goes into effect upon their death. A power of attorney gives a designated agent power to act for the "principal" (the signer of the document) during their lifetime. An advance directive specifies a person's wishes for their end-of-life care. A trust agreement lets a third party hold assets for the benefit of others. It can go into effect as soon as it's created or upon death if it's part of a will ("testamentary"). For more details, read Demystifying Estate Law “Legalese."
4. What is a personal representative?
Someone who creates a will appoints a suitable person to oversee their estate as the personal representative (formerly know as "executor" or "executrix" of the estate).
5. What is an agent under power of attorney?
An agent under power of attorney (POA) has the legal authority to represent you and make decisions on your behalf. A power of attorney is a legal document that authorizes someone to act as an agent under POA for another person. (Some people refer to the agent under power of attorney as the "power of attorney." Although common, the more appropriate shorthand would be "agent" or "attorney in fact.")
6. What is the difference between a trustee and a beneficiary?
A basic way to form a trust is to give something to someone else (a "trustee") for the benefit of a third person or entity (a "beneficiary").
One or more people, a trust company, or a bank may hold property as trustees under a trust agreement. A trustee is the legal owner of the trust property and holds it for the beneficiaries, who are equal owners of the assets. Someone can be both a trustee and a beneficiary of the same trust, but more commonly, the trustees and beneficiaries are different people.
7. What happens if I die without a will?
If you die "intestate" or without a will, a court will decide how to distribute your property or who cares for any children or pets based on statutory defaults. Depending on state law, your property would likely go to your next of kin, such as a spouse or children, and then pass to other family members. These decisions could go against your wishes. For instance, your property could go to people you wouldn't have chosen, such as a distant cousin with whom you are out of touch. A will puts you in charge of your estate and your final wishes -- you get to name who will carry them out and receive your assets.
8. What about planning for a disabled or dependent child?
If the child gets government benefits, you may want to create a special needs trust so they won't lose the money and it will be available for them. It is also important to consider an appropriate trustee for the child with disabilities in the future.
If you have questions or need help navigating your own estate planning, call (207) 377-6966 or contact us online today. We'll be happy to assist.