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1.
Revocable Living Trust.
The Revocable Living Trust is a legacy building device
that allows you to control Trust assets during your
lifetime, and protect your assets for your heirs after
your death. Assets transferred into the Trust during
your lifetime avoid probate and are kept private. Your
Trust specifies your beneficiaries and when the
beneficiaries receive their inheritance.
You are the Grantor/Settlor of your Revocable Living
Trust, meaning that you are the one granting property
into the name of your Trust. You are also the Trustee of
your Revocable Living Trust, meaning that you are the
decision maker of your Trust as to what to do with your
Trust assets. In addition, you are the beneficiary of
your Revocable Living Trust for so long as you are
alive.
While you are alive, the Trust is revocable and
amendable. It is revocable in the sense that at any time
you wish to transfer assets back into your name
individually, you may do so. You may also cancel or
“revoke” the document at any time. Additionally, you may
amend your Trust at any time. However, at your death,
the Revocable Living Trust becomes irrevocable and
un-amendable in order to protect your family and to
ensure that your wishes are followed.
Upon your death, your Revocable Living Trust assets are
divided according to the terms of your Trust. Your
Successor Trustee is the person/entity that you have
named in the document to succeed you and to follow your
wishes after death.
The Trust, if properly drafted, can reduce or avoid
estate taxes
As long as assets are in the name of your Revocable
Living Trust after your death, your beneficiaries are
protected from divorce proceedings, lawsuits and
creditors. Once money is transferred from your Revocable
Living Trust to your beneficiaries, that money is no
longer in your Trust and is no longer protected in that
manner.
2.
Last
Will and Testament.
If you have chosen a “will-based plan” your will is the
document that controls the amounts and distributions to
beneficiaries; names one or more Personal
Representatives to act to administer your estate through
the probate process; and can also designate one or more
guardians or conservators for minor children.
If, on the other hand, you have implemented a
“Trust-based plan”, you still need a Last Will and
Testament to ensure that several basic tasks occur at
your death. First, your Last Will and Testament makes
certain that your debts, funeral expenses and other
expenses are paid at your death. Second, your Last Will
and Testament provides that tangible personal property
passes to the persons that you choose. Third, your Last
Will and Testament appoints a Personal Representative to
manage probate affairs in connection with the
administration of your estate. Finally, your Last Will
and Testament has a “pour-over” function. This simply
means that any items that remain in your name
individually at your death are to be “poured-over” or
transferred into your Trust in the name of your Trustee
at your death.
3.
Durable Power of Attorney-Financial.
Your Durable Power of Attorney-Financial appoints
an agent (“attorney-in-fact”) to assist you with your
personal, financial and legal affairs. It may be
designed to take effect immediately or at the time of
your incapacity. You can provide that the Power of
Attorney retains its full force and effect even after
you become incapacitated. Your Agent has authority to
act on your behalf to accomplish many things, including:
signing checks, entering into contracts, filing tax
returns, representing you in legal matters, applying for
governmental benefits, on your behalf. This is a very
thorough and powerful document and should be kept in a
safe place at all times.
4.
Durable Power of Attorney for Health Care.
With your Durable Power of Attorney for Health Care
you can designate one or more persons (“Patient
Advocates”) to make medical decisions, on your behalf.
The Durable Power of Attorney for Health Care primarily
does two things. First, it is a medical power of
attorney which authorizes your Patient Advocate to act
and to make medical decisions on your behalf in the
event that you are unable to participate in your own
medical decisions. This general medical power of
attorney is broadly stated to authorize your Patient
Advocate to deal with your medical records, sign
releases, move you to alternative facilities and to do
any other actions necessary to make medical decisions on
your behalf. Second, in the event that two doctors
examine you and agree in writing that you are in a
“terminal medical condition” or an “irreversible
coma/persistent vegetative state,” as defined in that
document, you may specify your preferences regarding the
application of certain life-prolonging procedures.
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