Frequently Asked Questions

A Trust is an agreement that holds and controls property of one or more persons to provide benefits from that property to another group of persons. A Trust allows you to set up rules that you, and/or others you designate, follow to distribute income and property to others.  You can benefit from the property while you are alive. The rules survive you (or your competence) allowing you to do things with your property long after you have died or lost the ability to manage it. A Trust can also reduce costs and taxes that would be incurred if you passed your property down using a Will. A Trust can also streamline the process and timing of passing property onto others following your death and do much of that out of the public eye.

The four core documents you will hear of in estate planning are:

1)     Will
2)     Trust
3)     Advanced Medical Directive
4)     Durable Financial Power of Attorney

But things are not entirely that simple. Trusts can come in all sorts of flavors and varieties. Wills vary in form and type as well. Perhaps most importantly is the need to manage, and also to perhaps update, your estate documents. Trusts may need to be funded. Assets within a trust may need to be sold, bought, or reinvested. Assets might be moved from Trust to another. The people you appoint as your trustees or those you plan to receive your assets, and the circumstances surrounding them, may change. There are also assets such as bank accounts, retirement accounts, and life insurance that can have beneficiaries designated. So besides creating your estate documents there are tasks to follow including:

5)     Fund your trust
6)     Designate beneficiaries
7)     Keep your estate planning current by managing your estate and perhaps changing your documents or designated beneficiaries

An Advance Medical Directive is a modern combination of the oldest medical directive invention, the Living Will, and another planning document, the Durable Medical Power of Attorney. An Advance Medical Directive is a signed, witnessed, and notarized document where you specify your wishes as to medical care and also designate a person, your “agent,” to make those decisions for you. The idea is that your agent is someone you trust to interpret the statement of your wishes instead of a random stranger, like a doctor or hospital administrator. Most states have passed laws recognizing certain forms for Advance Medical Directives and you should follow and use the form provided by the state you reside in.

A Durable Power of Attorney for Financial matters allows you to designate an agent to manage your money and property if you become incapacitated and incapable of managing it yourself. Many people find themselves in this state in their lives, sometimes temporarily and sometimes permanently. Without having an appointed and empowered agent, the people who might strive to help you can end up in courts of law, and perhaps competing with others, to get access to your money just to pay your bills. Worse, someone might gain access to your property, legally or illegally, and either squander your money or make decisions that are not consistent with what you would have wanted.