One of the most important legal issues facing seniors is having an effective estate plan in place. An estate plan is a plan for the future and determines how your assets will be distributed after you die. Though many people understand that they should have a will, they may not know that a will is just one piece of an estate plan.
The documents needed for an estate plan include a will, a power of attorney for healthcare, a power of attorney for property and possibly a trust. An attorney specializing in estate plans can draft all these documents. Though it is possible for a person to draft their own will using a program such as Legal Zoom or Rocket Lawyer, which is inexpensive and convenient, having only a will is not a complete estate plan. Moreover, having an attorney draft an estate plan ensures that all the needed documents will be created to best suit your own particular situation as an attorney will take the time to learn about your wishes and assets. It is also important to know that just having a will does not avoid probate court as a will by itself is not an effective document as the probate court needs to approve the will and issue letters of office, which is the effective document needed to settle an estate.
A will becomes effective once a person dies. However, a will does not come into play if a person becomes incapacitated because of dementia or a coma. In such a situation, a person is no longer able to make decisions for themselves. A power of attorney for healthcare and a power of attorney for property are documents that are effective when a person is still alive but incapacitated. These powers of attorney appoint an agent who will follow your wishes regarding matters of healthcare and property at times of incapacity. If a person becomes incapacitated without having such powers of attorney in place, a guardian will need to be appointed by the court, which can be an expensive and time-consuming proposition.
Another document that can be an effective part of an estate plan is a trust. Having a trust will allow an estate to avoid probate. The trust is a document that effectively owns your property. This is especially important for a widow or widower or single owner of real estate as they are the sole owner on the title of the property. Putting that real estate into the trust allows the successor trustee to sell the property without having to go through the more expensive and lengthy probate process.
Once a probate plan with a will, powers of attorney and a trust is in place, there is an additional step that must be taken. The property put into the trust must be renamed in the name of the trust. If this step is not completed, the trust will not be effective.
Robert Monahan, Esq. is a lawyer in Gurnee, IL with his own practice in personal injury. He has a radio show on Thursday nights at 7 pm, called “Everyday Law,” on WRLR 98.3 FM, where he tries to demystify the law for the ordinary person. “Everyday Law” can be downloaded as a podcast from iTunes or other various podcatchers. His two websites are www.monahanfirm.com and www.gurneepersonalinjuryattorney.com. He also has two Facebook pages – “Robert A. Monahan, Esq.” and “Everyday Law.”