Estate Planning 101

February 2017

Generally, when someone contacts our Trusts & Estates group for advice on estate planning they are looking to do one of two things: (i) develop a plan should something happen to them and they become incapacitated, or (ii) develop a plan for the management and distribution of their assets after they pass away.

Planning for Incapacity

There are two primary documents when planning for incapacity: (i) a Power of Attorney – also referred to as a “financial power of attorney;” and (ii) a Health Care Directive – also referred to as “living will” or “health care power of attorney.”

Power of Attorney basics:

  • Authorizes someone (the “Attorney-In-Fact”) to act on your behalf as it relates to financial matters.
  • Primarily used in the event of incapacity.
  • Failure to implement a Power of Attorney could mean that your loved ones have to petition the court to appoint someone as a conservator of your estate.

Health Care Directive basics:

  • Informs others of your health care wishes.
  • Authorizes someone to act on your behalf as it relates to medical decisions if you are unable to make decisions for yourself.
  • Avoids conflict as to who has the legal right to make medical decisions for another.
  • Failure to implement a Health Care Directive could mean that your loved ones have to petition the court to appoint someone as a guardian to make decisions on your behalf.

Planning for After Death

There are different ways to plan for the management and distribution of your estate after your death. It is important that you work with your attorney to design the most appropriate method of administering your estate and distributing your assets as you wish.

Generally, most estate plans are created around a Will or a Revocable Living Trust. A Will plan is based around creating a Will that directs how your estate will be distributed and appoints an individual to manage and distribute your estate. It is important to note that having a Will does not avoid probate. The purpose of a Will is to provide instruction as to how your assets should be distributed, and the probate process is the method in which the assets are gathered and distributed. A Revocable Living Trust plan is an estate planning tool that can provide enhanced incapacity planning and typically provides for a more efficient administration of your estate. One of the primary benefits of implementing a Revocable Living Trust is the ability to avoid probate.

If you have any questions about the above information, feel free to reach out to the FMJ Trusts & Estates group and we would be happy to provide you with answers.

If you have any questions or would like to discuss your estate planning options, contact Trusts & Estates attorney Matt Jensen at matthew.jensen@fmjlaw.com or 952.995.9500.