What is the difference between Wills and Trusts?

 

Everyone has heard the terms "will" and "trust," but not everyone knows the differences between the two. Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan.

 

One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes. By contrast, a trust can be used to begin distributing property before death, at death or afterwards. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary." A trust usually has two types of beneficiaries -- one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.

 

A will covers any property that is only in your name when you die. It does not cover property held in joint tenancy or in a trust. A trust, on the other hand, covers only property that has been transferred to the trust. In order for property to be included in a trust, it must be put in the name of the trust.

 

Another difference between a will and a trust is that a will passes through probate. That means a court oversees the administration of the will and ensures the will is valid and the property gets distributed the way the deceased wanted. A trust passes outside of probate, so a court does not need to oversee the process, which can save time and money. Unlike a will, which becomes part of the public record, a trust can remain private.

 

Wills and trusts each have their advantages and disadvantages. For example, a will allows you to name a guardian for children and to specify funeral arrangements, while a trust does not. On the other hand, a trust can be used to plan for disability or to provide savings on taxes. Your elder law attorney can tell you how best to use a will and a trust in your estate plan.

 

What is a Durable Power of Attorney?

A durable power of attorney for finances -- or financial power of attorney -- is a simple, inexpensive, and reliable way to arrange for someone to manage your finances if you become incapacitated (unable to make decisions for yourself).

 

A financial power of attorney is a good document to make for yourself, but it can also be a great blessing for your family. If you become unable to decide for yourself and you haven't prepared a durable power of attorney, a court proceeding is probably inescapable. Your spouse, closest relatives, or companion will have to ask a court for authority over at least some of your financial affairs.

 

A financial power of attorney can be drafted so that it goes into effect as soon as you sign it. (Many spouses have active financial powers of attorney for each other in case something happens to one of them -- or for when one spouse is out of town.) You should specify that you want your power of attorney to be "durable." If you don't, in most states, it will automatically end if you later become incapacitated.

 

Or, you can specify that the power of attorney does not go into effect unless a doctor certifies that you have become incapacitated. This is called a "springing" durable power of attorney. It allows you to keep control over your affairs unless and until you become incapacitated, when it springs into effect. However, springing powers of attorney can cause serious delays and problems for your agent. 

 

What is a medical directive?

Health care directives allow you to inform medical professionals and family members about what kind of care you want when you can't communicate those wishes yourself. This article reviews several types of health care directives.   The names for these documents depend on the state in which you live, but they each let you leave instructions about the type of health care you want to receive. 

 

Living Will:  This document -- also known as a health care declaration -- bears no relation to the conventional will or living trust used to leave property at death. It's a document that lets you state what type of medical treatment you do or do not wish to receive if you are too ill or injured to direct your own care. (Among other things, you can use it to be sure doctors do -- or do not -- "pull the plug.") The document may have a different name in your state (it's often called a "declaration"), but you'll recognize it as the place where you write down your specific wishes about types of medical care.

 

Durable Power of Attorney for Health Care:  This document, also known as a medical power of attorney, allows you to name a trusted person to make medical decisions for you if you are unable to communicate on your own. The person you name to make these decisions is usually called your agent or attorney-in-fact.

 

What is Probate?

Probate is a legal process that takes place after someone dies. It includes:

 

• proving in court that a deceased person's will is valid (usually a routine matter)

• identifying and inventorying the deceased person's property

• having the property appraised

• paying debts and taxes, and

• distributing the remaining property as the will (or state law, if there's no will) directs.

 

Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person's property.

 

Can probate and inheritance disputes be resolved through mediation?

Probate dispute resolution, inheritance dispute resolution or inheritance dispute mediation is a particularized form of alternative dispute resolution dedicated to the subject matter of estate settlement and inheritance grievances between heirs and other family members. With the rising costs of litigation in terms of legal fees, expert witness fees, and similar costs that can span for one or more years of litigation, it is no surprise that dispute resolution—and in particular, mediation—is becoming more popular in all fields and subject matters, including trusts and estates litigation. Key points to keep in mind: Inheritance litigation exacerbates family grief . . . Mitigation is uniquely suited for solving familiy disputes . . . Addressing issues early is key to inheritance dispute resolution. 

 

What are Guardianship and Conservatorships?

The traditional distinction between guardians and conservators is as follows:

 

• ​​Guardians - A guardianship is a legal right given to a person to be responsible for the food, health care, housing, and other necessities of a person deemed fully or partially incapable of providing these necessities for himself or herself.

 

• Conservators - A conservatorship is a legal right given to a person to be responsible for the assets and finances of a person deemed fully or partially incapable of providing these necessities for himself or herself.

 

In some jurisdictions, a guardianship may be referred to as a "conservatorship of the person" or by some similar name, or there may be a type of guardianship position which subsumes many of the tasks of the conservator.

 

Under most circumstances where a person requires a legal guardian, the person's incapacity will also impair his or her ability to manage financial matters. Thus, petitions for guardianship are often brought at the same time as petitions for conservatorship, and all associated proceedings are combined. 

 

What is Elder Law?

Elder law is a legal term coined to cover an area of legal practice that places an emphasis on those issues that affect the aging population.

 

The three major categories that make up elder law are:

• Estate planning and administration, including tax questions;

• Medicaid, disability and other long-term care issues; and

• Guardianship, conservatorship and commitment matters, including fiduciary administration.

 

Other issues found under the umbrella of elder law include such areas as estate planning; wills; trusts; guardianships; protection against elder abuse, neglect, and fraud; end-of-life planning; all levels of disability and medical care; retirement planning; Social Security benefits; Medicare and Medicaid coverage; Medicaid planning (United States); consumer protection; nursing homes and in-home care; powers of attorney; physicians' or medical care directives, declarations and powers of attorney; landlord/tenant needs;real estate and mortgage assistance; various levels of advice, counseling and advocacy of rights; tax issues; and discrimination.