Having trouble choosing between a will and a trust? Worry no longer. The choice is really a false proposition, as a comprehensive estate plan is multi-faceted. In addition to a will, an individual should also consider including documents such as a living will, a medical and financial power of attorney, and various types of trusts. Our firm focuses on estate planning and can walk you through a wealth inventory and assessment in order to better explore each of these legal options.
First, most people are familiar with the purpose of a will. This estate-planning instrument designates which individuals will receive the testator’s property after his or her death. Without an estate plan, an individual’s property will be distributed according to state intestacy laws, which may leave significant individuals and entities out of the loop, such as partners or charities. A will can also designate guardians for minor children. With a trust, additional restrictions can be imposed on how beneficiaries will inherit their property.
Yet estate planning is not just about property and assets. An individual’s health care wishes can also be legally memorialized in a health care proxy or living will. This instrument contains instructions for the life-sustaining treatments that an individual might accept or decline in the event of a medical emergency.
Closely related to a living will is a medical power of attorney. The scope of this document is slightly broader, as it designates an agent to make all medical decisions on the individual’s behalf if he or she is unable to make those decisions. An example of this type of mental incapacity would be a non-life threatening coma.
Of course, if someone is unable to make medical decisions on his or her own, that incapacity will most likely extend to financial decisions. A financial power of attorney will designate an agent to handle the individual’s financial affairs until he or she is once again able to do so.
Related post: “Estate planning: another holiday checklist item,” Dec. 8, 2014