Estate Planning Questions & Answers

• Do I need an Estate Plan if I'm not wealthy?

  Many people believe estate planning is only necessary for the wealthy; however, that is far from the truth. Estate planning is essential for anyone with personal property, financial assets, real property, dependents, and/or minor children, regardless of the age of the person, the size of the estate, or the value. A well-crafted estate plan can help to ensure that loved ones are protected when you are gone and that assets are distributed according to your specific wishes.

• What is "Probate"?

  “Probate” is the general administration of a deceased person’s estate, either through the deceased person’s will, or through the relevant state laws through the probate court. A Personal Representative (“Executor”) is nominated – either in a will, or if no will, by the deceased person’s heirs, and appointed by the court to complete the probate process on behalf of the deceased person. This involves collecting the deceased person’s assets, pay remaining debts and liabilities, and distributing any remaining assets to beneficiaries or heirs. Having an effective estate plan can avoid the necessity of probate.

• What is the difference between a "Will" and a "Trust?"

  Both Wills and Trusts are legal documents that outline how assets will be distributed, and who will be responsible for such distribution. However, there are many key differences between a will and a trust, and depending on one’s specific circumstances, an estate planning attorney will recommend one or the other, or even both. Here are the biggest differences:

  First, a will only takes effect upon death, whereas a trust is created and effective during the individual’s lifetime. Next, individuals transfer assets to their trust in order to avoid probate, minimize estate taxes, and protect assets from creditors. A will alone does not avoid probate, does not minimize estate taxes, or protect your assets from creditors. Finally, a will nominates a Personal Representative to manage your estate after your death, and a trust appoints a Trustee to manage your assets not only upon death, but in the event of incapacity.

• What is the difference between a “Personal Representative” (i.e., Executor) and a “Power of Attorney?”

  A “Personal Representative” is an individual nominated in a person’s will to manage the person’s estate upon their death. A “Power of Attorney” is a legal document that nominates an “Attorney-in-Fact” to act on one’s behalf in the event the individual becomes incapacitated or unable to make financial decisions for themselves. A Personal Representative does not act until after a person’s death, and an Attorney-in-Fact under a Power of Attorney acts while the individual is alive but incapacitated – the Power of Attorney terminates upon the individual’s death.

• Do I even need an attorney to create an Estate Plan?

  Simply put, you can write some of your own legal documents that make up part of an estate plan. With today’s technology and infinite online resources, there are plenty of “DIY” templates that help you write them. However, the question you really should be asking yourself is, should you write your own estate plan? In asking yourself that question, you also need to ask yourself: will those do-it-yourself legal documents be valid? Will they hold up in court if ever contested? Estate planning attorneys are lawyers who have specialized knowledge related to estates, trusts, probate, elder law, real estate, tax, and many other legal issues that you need to consider in creating your estate plan. An estate planning attorney can provide you with personalized advice based on your specific situation and wishes.