You built it, shouldn’t you protect it? Should the government get the final say on how your assets are treated in the event of your death? Should the government get the final say on the care your children receive if you pass away unexpectedly? It is your legacy, you should ensure that you have the final say!
Legal tools have been created that allow a person to retain control of their own decision-making, even when they are in a legally or medically incapable of verbalizing their desires at the present moment. These tools, properly implemented and utilized, prevent the government from interfering with what are often times the most important and precious decisions of a person’s life. How are your assets and property distributed? Who cares for your children? What medical decisions do you want made for your healthcare in the even you are incapable of verbalizing them? Are these really decisions you want politicians making for you?
This is the first in a series of GRL Law Blogs focusing on a number of different topics in a broad legal field including sub-categories such as Estate Planning, Wills, Trust, Guardianships, Conservatorships, and Powers of Attorney. These are the legal tools by which a person controls the most important and precious decisions in the even that they are legally or medically incapable of making them for themselves. It makes sense as a starting point to provide easy to understand definitions to this legal jargon.
“Estate Planning” – The process of drafting legal documents that allow an individual to control what happens with their assets (cash, investments, property, real estate, etc.), when the either pass away or are no longer medically capable of making those important decisions. A properly developed estate plan can save the surviving family indescribable heartache, conflict and significant amounts of money, avoiding various penalties and government taxes. Usually a thorough estate plan includes a Will, Trusts, Medical Power of Attorney or what is often referred to as an Advanced Medical Directive.
“Probate” – The official definition is “the process of proving the validity of a will.” Most people have an instinctive, adverse reaction to this word, and attempt thinking or dwelling on it at all costs. However, appreciating and understanding what the probate process is can provide peace and security to all family members in some of the most difficult times of their lives. The probate process is a legal necessity when an individual passes away. Certain assets must be transferred to the surviving family members through the legal process and failure to follow this process can have significant financial and legal consequences. Outstanding debts of a deceased family member may also be extinguished through this court process which shields the surviving family members from the unpleasant and harassing attempts by creditors to contact family members attempting to collect on debts. Probate is a shelter from much of the legal storm that can follow a family member’s passing.
“Last Will and Testament” – More commonly referred to simply as a Will. A Will is a document that allows the individual to control what happens to their property and assets after they have passed away. It allows the individual to direct what happens with their property and to whom it should be passed. Once an individual reaches adulthood, a Will should follow not far behind. Married? A Will makes a great wedding present. New parents? A will becomes a must. Important decisions such as who will care for your children if you pass are also spelled out in a Will. As we age and property and assets grow, so too does the importance of a Will. Wills certainly require some serious thought and often-times difficult discussions, but these decisions pale in comparison to the additional stress and grief that can befall surviving family members when these decisions have been ignored.
“Trust” – The technical definition of a trust is an arrangement that allows a third party (trustee) to hold assets on behalf of beneficiaries with certain conditions and instructions for that trustee set forth ahead of time. A trust is a traditional tool used in the broader field of Estate Planning. It is, in its simplest form, a written document that details out what you require will happen to your assets and directs the trustee to ensure that your wishes are carried out. If you don’t want your teenagers to end up with a large sum of money when you pass away before they are responsible enough to make intelligent decisions, you can instruct the trustee to pay out specific sums as you direct for their living expenses and further articulate at what age they should have access to their full inheritance. The application of the legal tool of a Trust is expansive and is commonly used to keep family matters private that would otherwise be public record through the formal legal probate process.
“Guardianships and Conservatorships” – These two tools go hand-in-hand. A Guardianship is a legally recognized relationship that allows an individual to make decisions for another’s well-being and/or health-care. A Conservatorship is when an individual has a court ordered right to make financial decisions for another person. Guardianship allows decision related to body and health whereas Conservatorship authorizes decisions and control over finances.
“Power of Attorney” – Very similar to Guardianships and Conservatorships but the main difference is that Power of Attorney is not a court ordered relationship. It is a written authorization and can be limited on subject-matter and occasions. There are two primary types of Power of Attorneys. First, there is a Power of Attorney for Health Care purposes. This allows the named party to make decisions for another person should that person not be able to make those decisions by themselves. The second is Power of Attorney for financial decisions which grants another person the ability to make general or specific decisions on the individuals behalf. Travel is a common reason for people to grant Power of Attorney for for both financial and health care purposes. Parents, anytime you both travel away from the children for an extended period, a medical power of attorney for your children is a must. Spring Break is just around the corner. Are you properly prepared?