Attorneys use various devices to assist clients in planning for the future.
The most commonly known estate planning device is the Last Will and Testament, which becomes effective when its principal — the testator — passes away. It has no effect while one is living. Your Last Will and Testament announces what happens to your property and your wealth when you die. It also names your fiduciaries when you die.
Your executor administers your estate pursuant to the wishes outlined in your will and according to law. If your will creates a trust, it will also name a trustee; a person responsible for monitoring and utilizing the trust resources. (The trust usually includes money, but might include other assets, such as a house). If you have minor children, your will can designate a guardian to care for your children.
The Power of Attorney is another common estate planning device. It is effective only while you are living. It has no effect after you die. Your Power of Attorney grants a fiduciary, known as your attorney-in-fact, the authority to conduct business on your behalf. This authority typically includes banking but also may include real estate transactions and other purchases and sales. Most Powers of Attorney are durable, meaning they remain in effect even if you become incompetent.
Another estate planning device is the Living Will. It becomes effective when you are unable to make your own medical decisions. Your Living Will announces certain decisions, treatment options, and other important desires should you become seriously ill or injured and cannot make those decisions. For example, your Living Will might demand that certain treatments be withheld should your chances of recovery be small. Among other issues, it can also announce whether you wish to be an organ donor. Your Living Will serves to designate a fiduciary — known as a healthcare representative — to administer your wishes, obtain your medical documents, and make payments on your behalf.
A commonly overlooked estate planning device is the deed to your property. This is because the manner in which property is titled dictates what happens to it when you die. For example, if you owned a home before getting married, you will likely want to add your spouse to the deed to ensure that your spouse owns the house when you pass away. If the deed is not amended, and if your will is silent on the issue, such lack of action may lead to confusion and conflict among your family. To the contrary, you might want to remove a spouse from the deed if you foresee the need for Medicaid assistance in the future.