Law Offices of Erin M. Windsor - An Estate Planning Law Firm

An estate plan is a specifically individualized and designed set of documents which allows one to manage their estate during their lifetime and distribute one's estate after death. A person's estate consists of all his or her property and possessions. This includes bank accounts, real estate, furniture, automobiles, stocks, bonds, life insurance policies, retirement funds, pensions, and death benefits. An estate plan allows one to pass on his or her estate more quickly while being subject to fewer taxes after death. 

          An estate plan can consist of any one or combination of the following: 

Wills 
          A will is the most common document used to specify how an estate should be handled after death. Anyone designated to receive property under a will is called a beneficiary. A will can be simple or elaborate, depending upon the size of the estate and the wishes of the person who makes it - the testator. Many types of post-death instructions may be included in a will. A will may dictate who should receive specific items of furniture, artwork, or jewelry. A will may name a guardian who will take care of minor children should there be no surviving parent. A will even may be used to disinherit a child if the testator does not want the child to receive any part of the estate. The options for what a person can do with a will are varied, but there are limitations.
Making out a will does not guarantee that survivors avoid all distribution problems, but a carefully drafted document can minimize their time in court. 

Trusts 
          A trust is another estate-planning device frequently used to manage the distribution of a person's estate. To create a trust, the owner of property (grantor) transfers the property to a person or institution (trustee) who holds legal title to the property and manages it for the benefit of a third party (beneficiary). The grantor can name himself or herself or another person as the trustee. A trust can be either a testamentary trust or a living trust. A testamentary trust transfers the property to the trust only after the death of the grantor. A living trust, sometimes called an inter vivos trust, is created during the life of the grantor and can be set up to continue after the grantor's death or to terminate and be distributed upon the grantor's death. 

          Trusts have many advantages over wills. All trusts have the advantage of allowing the grantor to determine who receives the benefit of the money, when it is received, and what conditions must be met. If a spouse is unable or unwilling to manage assets, if children are minors or are unable to handle money responsibly, or if a beneficiary is disabled, creating a trust can be a better way of passing on assets. The testamentary trust allows the grantor to retain unrestricted control over his or her estate. A testamentary trust becomes effective only upon the death of its grantor. Like a will, a testamentary trust can be changed at any time prior to death. 
 
          Making out a trust does not guarantee that survivors avoid all distribution problems, but a carefully drafted document can minimize their time in court.

Advanced Health Care Directive (“Living Will”) 
          An Advanced Health Care Directive allows you to direct your doctor and representative about your wishes for your health care should you become incapacitated and are unable to make those decisions at a later time. Through an Advanced Health Care Directive you can designate a representative and an alternate representative to make health care decisions on your behalf should you be unable to do so; indicate whether you wish to prolong your life through medical treatment or withdraw such treatment; request pain management; and express your desires regarding organ donation. 

Power of Attorney for Financial Matters 
          A Power of Attorney for Financial Matters authorizes a person designated by you to make decisions, and act as an “agent” on your behalf with respect to any real property, personal property or financial matters. You will decide what authority and powers this “agent” has over your estate and under what circumstances the agent’s authority becomes effective. The agent’s authority may become effective immediately, or upon incapacity of the principal. Without a durable power of attorney, a person's family might need to go to court to have someone appointed to handle the person's legal affairs. 

What happens if I do not have an estate plan? 
           If a person does not have a will or has not adequately planned for the distribution of his or her estate at death, his or her survivors may face a complicated, time-consuming, and costly process. Often survivors wind up having to pay more taxes on their inheritance than they would have paid had there been a will or other estate planning tool. To provide for surviving friends and relatives, or to support favorite causes or charities, a person should plan ahead for the distribution of his or her estate. With planning, an estate can be distributed as fairly as possible with as little tax burden as legally allowed. When a decedent leaves no will or other comparable estate planning tool, he or she is said to have died intestate. When a person dies intestate, the probate court steps in to divide the decedent's estate, according to a formula provided by the state inheritance laws. Under the state inheritance laws, the probate court uses formulas set by the legislature to divide a deceased person's possessions among any surviving relatives. One problem with relying on a probate court applying state inheritance laws to distribute an estate is that it may not distribute the estate in the manner the decedent would have wanted. State inheritance laws only recognize relatives. The inheritance laws never permit the probate court to support a decedent's close friend, lover, or favorite charities. If no relatives are found, the estate goes to the state. 

Probate 
         With very few exceptions, the estate of a person who dies owning property in his or her name cannot be legally distributed without first going through probate. Only if a decedent left the entire estate to a spouse, or if the entire estate is worth no more than $100,000, or if all of a decedent's property is held in joint tenancy or in trust, can the survivors avoid probate. The first duty of the probate court is to determine whether the decedent left a valid will. If the decedent left a valid will, the probate court oversees the process of settling the estate according to the terms of the will. If the decedent did not leave a will or if the probate court determines the will is invalid, the probate court applies the state inheritance laws.