USING THE FIVE MOST POWERFUL TOOLS IN ESTATE PLANNING
HERE IS A BRIEF OVERVIEW OF EACH TOOL:
TOOL # 1, REVOCABLE LIVING TRUST: Unlike a Will, a trust DOES NOT HAVE to be taken to Probate Court when a person dies. Instead, the person appointed in the trust document takes over IMMEDIATELY after death, gathers the deceased person's assets, pays any legitimate bills and taxes and then distributes the trust assets according to the instructions in the trust. There is NO REQUIREMENT to hire an attorney for Probate work because the matter IS NOT taken to Probate Court. This fact alone can save thousands of dollars in legal fees. There is NO five month (or longer) waiting period to finish the work because the trustee can complete the process as quickly as he or she is able. The matter is NOT public record and only the persons named in the document are entitled to know about the deceased person's personal and financial matters. The Living Trust method is over 200 years old and has worked effectively for hundreds of thousands of individuals.
TOOL # 2, SPRINGING, DURABLE POWER OF ATTORNEY: If a person becomes incapacitated, it may be necessary to have a court guardianship established for him or her. However, if that person has made a Power of Attorney which "springs to life" only in the event of incapacity, the person named will not need to go to court and can handle the incapacitated person's financial affairs independently.
TOOL # 3, HEALTH CARE POWER (ALSO KNOWN AS HEALTH CARE REPRESENTATIVE APPOINTMENT) : This document is designed to give authority to a trusted person to make medical decisions for the person who created the document, if that person is unable to communicate with medical providers. In addition, this person has the power to enforce the terms of a Living Will.
TOOL #4, LIVING WILL: The Living Will tells all health care providers that you do not want to have your life artificially maintained if you are terminally ill and cannot communicate with others.
TOOL # 5, "POUR-OVER" WILL: Whenever a Revocable Living Trust is used as the major component of an estate plan, it is wise to plan for the possibility that an asset might not have been transferred into the trust before death. This simple Will "picks up" those forgotten assets and transfers them to the trust for distribution under the trust's terms.
WHY DON'T MORE PEOPLE ESTABLISH ESTATE PLANS USING THESE TOOLS? One reason might be that they haven't had an opportunity to learn more about these tools and what they can do to protect an individual's assets. DON'T LET ANALYSIS-PARALYSIS CAUSE YOU TO LOSE YOUR VALUABLE RIGHTS. Analysis paralysis is a term often used when a person "over-analyzes" his or her options and therefore does nothing about planning. Remember, if you let analysis-paralysis take over, state law will decide how your assets are distributed at death.