WILL, LIVING WILL, TRUST, LIVING TRUST, OR POWER OF ATTORNEY?
If you have any assets you want to leave to loved ones or friends, you should have documents stating who, what, and how much. If you have wishes regarding how you would want to be cared for if you were unable to make your wishes known, it’s important that you make those wishes known, so the state doesn’t decide for you. If you die without a will, your heirs would have the costly and difficult job of dealing with the court system to carry out your wishes. It could take months or years to get things worked out. The bottom line: make your wishes known, and have them on paper!
WILLS
Wills are legal documents that give direction about how to distribute your property after your death. They don’t take effect until your death.
LIVING WILLS
Living wills are documents that express your wishes about being kept alive if you should become terminally ill or seriously incapacitated. It can also be referred to as an advance directive, health care directive, or a physician’s directive. A living will should not be confused with a living trust, which is used for holding and distributing your assets to avoid probate. It’s important to have a living will as it informs your doctor and your family about your desires for medical treatment in the event you are not able to speak for yourself.
TRUSTS
A Trust, generally, is a legal entity that can hold title to property. There are three parties to a Trust agreement: the Trustmaker who creates the Trust, the Beneficiary who receives the benefit of the property held in the Trust, and the Trustee who manages the Trust.
LIVING TRUSTS
A living trust allows you to choose how your property will be distributed after your death. The term “living” refers to the fact that these trusts take effect while you are still alive. In order for this to happen, you must transfer your property and assets into the trust. Under most living trust arrangements, you, while still competent, are free to change the terms of the trust.
POWER OF ATTORNEY
A power of attorney is a legal document authorizing another person to act on your behalf, should you become unable to do so for yourself. The authorized person is known as an agent. The AARP has a great page on understanding the different kinds of Power Of Attorney: http://www.aarp.org/family/lifeafterloss/articles/EstatePlanningPowerofAttorney.html
PROBATE
Probate is the legal process that usually involves filing a deceased person’s will with the local probate court, taking inventory of the person’s property, paying all legal debts, and eventually distributing the remaining assets and property. If a person dies without a will (referred to as “intestate”), the estate still must be probated and property will be distributed according to state law.
Although there are other issues to consider, the primary advantage of a living trust is that it can make it easier to avoid probate. Property transferred into a living trust before death does not go through probate. Although this may seem like an incredible benefit, the reality is that in many cases, the estate will not be probated regardless of whether the person had a living trust or a will.
The first step is to learn about your state laws and then assess the size and value of your estate. This will help determine whether you have to worry about probate. If you still want to go ahead with a living trust, there are additional issues to think about in finding the right product and deciding whether a living trust is worth the expense. The decision about the appropriateness of a living trust should be made, whenever possible, in consultation with an experienced estate planning attorney.
Concerns about the effect of a living trust on Medicaid eligibility should also be considered. The problem with Living Trusts for someone applying for Medicaid is that everything titled in the name of the Living Trust is considered an available asset, even if it was exempt outside of the Living Trust. For instance, your home is exempt (up to $500,000), but if you deed it into your Living Trust, it suddenly loses its exemption. That alone can cause you to become ineligible for Medicaid, forcing you to deed your house out of the Trust back into your own name. The same would be true of your car or even your other personal property.
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ONLINE WILLS AND TRUSTS
There are internet articles saying that if your finances are really simple, you can get a quick and easy will or trust using an online document service. One of the most advertised services is LegalZoom, but you might want to read some reviews before considering going that route. Downloading forms for wills and trusts from a company like this will cost less than if you use a lawyer, but keep in mind that you’ll run the risk that there will be oversights and mistakes. Just one wrong word could change the meaning of your words, or void the document. The #1 cause for wills getting labeled as invalid is the failure to follow state guidelines involving witnesses. If your will is held void, your estate would enter into probate and who gets what will be up to the state. So if you want to be sure your document is legal and binding, you should avoid using unapproved online wills.
In most states, if you are married and have children and you die without a will, your spouse will get half of your assets and your children will split the remaining assets. If you don’t have a spouse or children, your estate will be divided among your parents, brothers, sisters, and their descendants. But state laws vary.
Each state has very specific requirements that must be met to make a will enforceable:
- How old you must be to make a valid Last Will.
- The mental capacity you must have to make a valid Last Will.
- An understanding of your net worth and who your heirs at law are.
- How you must sign the Last Will (usually in your own handwriting or by another at your specific direction).
- Where you must sign the Last Will (usually at the very end of the document).
- Who must be present when the Last Will is signed (usually in the presence of at least two witnesses).
FINDING A LAWYER FOR YOUR WILL OR TRUST
The best way to find a good lawyer is to:
- Get a referral from someone you know.
- Ask for a referral from a lawyer in a different field. If you already have a lawyer, ask them to recommend a will and trust lawyer.
- Contact the Bar Association in your state and ask for their referral service.
- If you have low income, you might qualify for a ‘pro bono’, or unpaid, lawyer. Call Legal Services in your area and ask for assistance.
Be careful about calling a lawyer from a television commercial or advertisement. They might not be qualified or their claims might not be true. Before you sign an agreement, read it carefully and make sure you understand it. If the lawyer doesn’t offer a written agreement, don’t go with that lawyer. Ask questions if you don’t understand the written agreement. Make sure you understand how you’ll be paying for their services, which is called the fee arrangements.
LEGAL ISSUES FOR PEOPLE IN SAME-SEX OR DOMESTIC PARTNERSHIPS
For Lesbian, Gay, Bisexual, or Transgender persons of any age—and especially for older adults—certain legal and financial documents become increasingly important. These determine who has the responsibility to provide care, the power to make medical decisions, and the legal authority to utilize financial resources on your behalf if you are incapacitated. As a caregiver to a partner, friend or family member, it is essential to discuss with the care recipient what legal protections are available and become familiar with the limitations of these protections.
Since most states do not recognize same sex committed relationships, these couples need to complete certain legal documents prior to incapacity. Some people decide to rely on their “family of choice,” a group of trusted and valued friends who provide care and support during an illness. However, without legal protections in place, these relationships might not be legally recognized, and could easily be questioned or contested by a biological family member. It is imperative that you understand relevant local, state and federal laws and act to secure legal protections.
TOP MYTHS ABOUT LAST WILLS AND TESTAMENTS FOR GAYS
Last wills and testaments are recommended for all serious partnerships. They are especially important for same-sex couples that are not legally married, but share assets (money, house, cars, etc.). Without the right to marry, neither you nor your partner have a legal right to each other’s assets upon death. This website answers many questions.
My situation is a bit different from most. My son who is now 20 had a stroke at birth. He has many speech, learning and dexterity problems. He has gotten SSI since he was 18. But to stay on this, he can’t own anything like a house. My concern is once I pass away, I would like to leave him the house plus a life insurance policy. He in no way can handle making monetary decisions on his own. So, I need someone to advise me on the best way to handle things.
Thank You.
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Hi Terry,
I have a nephew with disabilities, his mother enlisted the help of an attorney to set things up after she has passed. He can not handle monetary tasks or decisions either, so both myself and my niece (his sister) will be aiding him.
~Char
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My mother is 80, her mind is slowly fading. She has lived with my husband and I for over 15 years now. She refuses to discuss any final arrangements. She is quite healthy. I have five siblings, none of who step up to the plate at all, so cannot count on them for help. I have asked my mother about her final wishes. She just laughs and refuses to discuss. I finally gave up and told her if the time comes, she will be have a memorial service, be cremated in her work uniform and her ashes taken to NY to be scattered over my grandparents grave, her parents, and they will rest forever together. She has no will, owns no property. Do I need to do anything legal wise since she refuses to acknowledge any last wishes? Could I be in for a legal battle with siblings? Thanks for your help.
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Hi Susan, you said your mother has no property. If she has no other assets, then a Power Of Attorney may be what you want her to have. If she designated you as her agent, that would mean that if she were no longer able to make decisions for herself, you would be able to make her wishes known. Some states allow oral Powers Of Attorney, but keep in mind that many institutions (like hospitals, banks, IRS) require a Power Of Attorney to be in writing and/or notarized. I added Power Of Attorney info and a link, above.
If she does have assets, then yes, she should have a Living Will or Living Trust. Unfortunately, I know of a few friends who experienced sibling “battles” after the loss of a parent or grandparent. Keep in mind, this can occur even with a will or trust in place. But having last wishes written on a legally enforceable document is a big help in avoiding these situations.
Your mother may feel that making a will means she’s closer to death. She might be frightened by the prospect. Perhaps explaining what a “Living Will” is might make it less intimidating. Do you and your husband have wills? If you don’t, you should. I would suggest you first start by telling your mother that you and your husband are going to have your wills done. Read through the information above and find the kind of will or trust you want, and the reasons that will resonate most strongly with her, and with you. Explain to her that if something were to happen to you and your husband before you had your wills done, your assets would be divided equally among her and your siblings (laws vary among states). Tell her you want to be sure that she wouldn’t have to go through years of legal action and thousands of dollars to get the assets you would want her to have for her remaining years. Perhaps, if you show her that creating a will isn’t so much about death as it is about the loved ones who remain, she might be persuaded to go with you to a lawyer and have her will done at the same time.
Explain to her that a Living Will would let the hospital know her wishes if she were unable to do so, and that without a Living Will or Power Of Attorney, you would not be able to do this for her. The state would end up making her final decisions for her. If she were being kept alive by life support systems, would she want you and your siblings standing around, arguing with each other and the hospital over what she would want done? If she wants any say at all in what would happen to her in this situation, she needs to make her wishes known.
If all else fails, I would look into the oral Power Of Attorney regulations for your state.
I hope this helps. ~ Jean
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