Estate planning is an important legal tool often put on the back burner
because people are very busy with their day-to-day activities. Before
putting off estate planning any further, it is important to consider the
various estate planning options available - particularly three heavily
used estate planning tools: (1) wills, (2) living wills, and (3) living
trusts. As laws vary by state, it is always important to seek legal advice
from local family attorney experienced in estate planning in your jurisdiction.
A will (or "last will and testament") is a written legal document
that is filed with the court and explains how you would like any assets
remaining in your estate to be distributed upon your death. The requirements
for drafting a valid will are based on state-specific law. However, the
following is a non-exhaustive list of common legal requirements when drafting a will:
- The person must be the age of majority (usually 18 or older).
- The person must be of "sound mind," or have the mental capability
to make knowing and voluntary decisions regarding the disposition of his
or her property.
- The person must sign and date the will in front of two witnesses who hold
no interest in the will.
The process by which a will is effectuated upon your death is called probate.
In essence, the probate process confirms the validity of the will. This
process differs depending on your jurisdiction, so it is important to
assure compliance with the probate process in your jurisdiction.
A living will, not to be confused with a will, is a health care directive.
This document provides instructions for your medical care in the event
you are incapacitated and unable to communicate your medical care decisions.
Because a living will expressly determines medical care in the event of
incapacitation, drafting a proper living will eliminates disagreement
and uncertainty among family and other loved ones in otherwise difficult
and stressful times. Requirements of a living will are based on your local
state law. The following is a non-exhaustive list of procedures that may
be included in a living will:
- Whether a breathing machine should be used.
- Whether resuscitation efforts should be taken.
- Whether a feeding tube is authorized to sustain life.
- Whether you want to donate organs in the event of death.
Another consideration when preparing a living will is to designate someone
as your durable power of attorney for health care. Your designated power
of attorney cannot change the directions in your living will, but he or
she can make health care decisions not expressly covered in your living
will. This assures that you have someone you trust making any decision
arising out of circumstances not otherwise covered in your living will.
Once the living will is drafted, always provide a copy to your physician,
any designated durable power of attorney, and family members. Lastly,
it is important to occasionally review your living will, as circumstances
may change regarding your decisions for medical treatment.
A living trust is a private agreement in which one person (a "trustee")
holds property for another (the "grantor") for the benefit of
at least one third party (the "beneficiary"). The agreement
creates a separate legal entity, the trust, which holds and owns your
property and assets during your lifetime.
The grantor provides instructions to the trustee who manages the assets
within the trust for the benefit of the beneficiaries. A grantor can also
be the trustee, however; when the same person acts as both grantor and
trustee, the grantor should have a successor trustee established in the
event the grantor dies or is incapacitated and can no longer function
as the trustee.
Distributions of a living trust may be structured in a number of ways:
- The living trust could be created to distribute assets on a staggered basis
(such as making distribution from the trust to the beneficiaries on their
twentieth birthday, twenty-fifth birthday, and thirtieth birthday).
- The living trust also could be a pure discretionary trust, providing the
trustee complete control of the trust distributions to the beneficiaries.
- The living trust could be a support trust, requiring the trustee to make
distributions based on the health, education, support, or maintenance
of the beneficiaries.
A living trust may be revoked or amended at any point in the grantor's
life. Depending on how the trust is established, when the grantor dies,
the trust may either continue in nature, or it may terminate. If the trust
terminates, the trust provides instructions for final distribution of
And lastly, a living trust can keep your estate planning private. Unlike
the distribution of a will that is supervised by the court, a trust is
a private agreement and need not be filed with any court.
Some of these benefits offered by a trust may, however, be muted depending
upon your situation. For example, some states do not require probate for
estates that are of very low value. As a general matter, the creation
of a trust, because it is a more complex legal document, requires a greater
Contact a McKinley Irvin family attorney to learn more about whether a
living trust might benefit you, or read more about