Frequently Asked Questions
- What is elder law?
- What is estate planning?
- What does an estate plan include?
- How often should I update my estate plan?
- What is probate?
- What are the advantages of avoiding probate?
- What is a will?
- What is a trust?
- What are the different types of trusts?
- What is the difference between a trust and will?
- What does intestacy mean?
- What is a Power of Attorney?
- What can a Power of Attorney do?
- Can I revoke my Power of Attorney?
- What is the difference between an agent and an executor?
- What is asset protection?
- How does asset protection work?
- Does my living trust protect my assets?
What is elder law?
Elder law is a section of the law dedicated to guiding the aging population to estate and health autonomy. Through focusing on a client’s goals, elder law attorneys are equipped on carrying out a client’s wishes when it comes to vital aspects of planning for the future, like long-term care needs, health directives, and estate plans.
An elder law attorney is qualified to provide guidance in a number of areas, including:
- Estate planning
- Social Security
- Veterans benefits
- Health and personal care
- Powers of attorney
- Elder and abuse fraud
- Wills and trusts
What is estate planning?
At its core, estate planning is the process of deciding how you want your assets distributed and managed after you die. A sound estate plan also can accomplish a number of important objectives, including:
- Determining the heirs to your estate
- Reducing the tax burden on your estate
- Determining the personal guardianship of your children
- Ensuring the timely passing of your assets to your designated beneficiaries
What does an estate plan include?
Anything you own, such as a house, car, bank account, etc., you should consider in your estate plan. A good rule of thumb is to go through your home and take a physical inventory of anything you own that is worth $100 or more. Beyond focusing on your assets, it is important to consider your goals and wishes as to the handling of your medical, financial, and personal affairs.
How often should I update my estate plan?
While every circumstance is different, a good rule of thumb to follow when updating your estate plan is as follows:
- Residency change
- Change in marital status
- Someone named in your estate plan has died
- Birth or adoption of a child
- Change in financial status
- Obtained or disposed of a significant address
- Change in state law
- Passage of time
What is probate?
Probate is the legal process a court takes to conclude an individual’s legal and financial matters upon death.
The court ensures that all outstanding debts, legal fees, and taxes are paid and that all assets have been catalogued and appraised before being distributed.
Probate usually involves paperwork and court appearances by attorneys. Attorney and court fees are paid from the estate, which would otherwise go to the beneficiaries who inherited the deceased person’s property.
What are the advantages of avoiding probate?
The probate process tends to be very time consuming. Since it is controlled by the courts, it can end up taking more than a year to complete.
Although it varies by state, probate also is very costly. Probate fees are taken from the estate and typically costs between 5 to 10 percent of the total value of the estate.
Probate is a public process. All documents and information used during the process are part of the public record, which can be a problem if you would prefer the details of your estate be left private.
What is a will?
A will is a legal document dictating your final wishes regarding the distribution of your assets upon death, as well as the care of any minor children.
Wills must go through probate before its provisions can be implemented.
A will can be modified or revoked at any time during your life
What is a trust?
A trust is a fiduciary arrangement that involves the transfer of property to a third party trustee to hold and use assets for the benefit of a beneficiary.
Unlike wills, trusts typically avoid probate, so the beneficiaries may receive assets quicker than they would through a will.
What are the different types of trusts?
The general categories of trusts are revocable and irrevocable. Within these general categories, there are quite a few different types of trusts that may be utilized to handle different categories of assets, or to accomplish gifting goals to various types of individuals and entities. An attorney can help you decide which trust would be best for you.
What is the difference between a trust and will?
The main difference between a trust and a will is that a trust is put into effect as soon as it created and “funded” with your assets, while a will only goes into effect after you have died.
What does intestacy mean?
Intestacy is when an individual dies without a valid will. In that case, the estate is distributed according to the state’s intestacy law.
What is a Power of Attorney?
A Power of Attorney is a written document that grants an individual the authority to manage your affairs. This document makes the individual granted authority an attorney-in-fact, acting on your behalf if you are unable to do so. Typically, this is in regards to financial or medical matters.
A power of attorney may be terminated when its purpose is fulfilled or at your death or incapacity. However, a durable power of attorney remains in effect even if you are incapacitated.
What can a Power of Attorney do?
A Power of Attorney can have a broad or very limited scope of legal powers to represent and make decisions for you, as the grantor. Therefore, it is important to discuss your goals with a Cordell Planning Partners attorney to ensure you are giving a proper amount of power.
Can I revoke my Power of Attorney?
Yes, you can revoke your Power of Attorney by filling out the necessary paperwork. Most states require the revocation to be signed, witnessed, and notarized. Once the paperwork is completed, it will need to be distributed to any financial institution or place where your Power of Attorney had authority. Sometimes, it also is appropriate to record the revocation with the recorder of deeds.
What is the difference between an agent and an executor?
An executor (also known as a personal representative) is someone that is named in a will to handle an individual’s affairs after they have died. An agent (also known as an attorney-in-fact) is someone granted to be an individual’s Power of Attorney to handle their affairs while they still are alive.
What is asset protection?
Asset protection is a type of planning that is put in place to protect an individual’s assets from the government, creditors, fraud, or criminal predators.
How does asset protection work?
Asset protection planning involves finding the best means to protect assets from future claims. Common planning involves setting up irrevocable trusts, individual retirement accounts (IRAs), business entities, and retitling assets.
Does my living trust protect my assets?
There are many kinds of trusts, but generally speaking, a revocable living trust does not protect your assets from a claim a creditor may have against you. However, assets titled in the name of an irrevocable trust may be protected from claims of future creditors.