A living trust will avoid probate for all assets that have been properly transferred to the trust.  Probate is a costly, time-consuming process that many estates can, with proper planning, avoid.  Legal fees for probating an estate are usually much higher than the fees for establishing a trust and/or administering a trust.  Further, probates can take a year or longer to complete whereas a trust administration can be completed in a much shorter time.  A trust also can avoid a conservatorship, which is a court supervised proceeding that is expensive, time-consuming and restrictive.  Conservatorships are needed when an individual can no longer manage his or her financial affairs.  A conservator is appointed by a court and given the power to manage the conservatee’s financial affairs, and also make decisions concerning the conservatee’s living arrangements.  A properly prepared trust will designate a successor trustee who will manage the trust for the benefit of the trustor, sometimes avoiding the need for a conservatorship.  For married couples with estates subject to the federal estate tax, a living trust can reduce or eliminate federal estate taxes by setting up Exemption Trusts, Disclaimer Trust, and/or Bypass Trusts.

Regardless of the size of your estate, the attorneys at Harris & Plottel can provide you with the advantages and disadvantages of having a living trust and help you make an informed decision regarding your estate planning needs.

In order to stay current with ever-changing laws and family dynamics, we recommend a periodic review of your entire estate plan.  Making changes to your estate plan requires the same legal formalities as executing a new estate plan.  Contrary to popular belief, handwritten changes on your existing will or living trust will not be considered valid amendments.  Some circumstances that should trigger a review of your estate plan include: marriages or divorces; births or deaths of family members; minor children or grandchildren becoming of legal age; relocation to or from another State; purchase or sale of real property or other assets; changes in estate and gift tax law; changes with decision makers (who will make health and financial decisions for your if you are not able); etc.  If you are considering a change to your estate plan or just need to ensure it conforms with current laws, Harris & Plottel, LLP can help.

A will allows you to decide who will receive your assets after you die.  It also allows you to nominate an “executor,” which is the person or entity that must be appointed by the court to administer your estate after your death.  Contrary to common misconception, a will does not avoid a probate.  Further, the person you designate as executor has no authority over your estate during your lifetime.  Absent a will or other testamentary instrument, however, your estate would pass “intestate” meaning certain relatives designated by statute would inherit your estate.  A will, whether it be a stand alone document or a companion to your living trust, is a necessary component of a comprehensive estate plan.

A Durable General Power of Attorney (DPA) allows a person (principal) to appoint another (agent) to act on behalf of the principal in matters related to finances and assets.  Great care must be exercised when creating and using a DPA.

First, not all Powers of Attorney are durable.  Unless your Power of Attorney provides that the instrument shall not be affected by your incapacity, your agent’s authority is not durable and ends upon your inability to act.  Simply stated, if your Power of Attorney does not expressly provide that the instrument is not affected by your incapacity, your agent cannot act if you become incapacitated.

Second, not all Powers of Attorney are general.  A Power of Attorney can be used for nearly anything that a principal can do his or herself.  The Power can be restricted to one specific act or limited in time.  Unless restricted, however, a Power of Attorney is considered general and the agent is authorized to perform all acts allowed under current law.  There are, however, limits to the authority of the agent as discussed below.

Third, not all Powers of Attorney are immediately effective.  Unless otherwise provided in your Durable Power of Attorney, your agent’s authority to act begins upon your signing of the document.  If, however, you want your agent to act on your behalf but only when you become unable to act yourself, you should consider a Springing Durable General Power of Attorney.

And finally, not all Powers of Attorney are the same.  Many of our clients ask if a stationery store Durable General Power of Attorney is adequate.  The simple answer is, “it depends on what you want your agent to do.”  If you expect your agent to pay your bills and conduct simple business on your behalf, a simple Durable General Power of Attorney may be sufficient.  However, if you are concerned about protecting your estate should you become incapacitated and require long term care, a simple Durable General Power of Attorney isn’t worth much.  Durable General Powers of Attorney can contain pages upon pages of granted authorities or merely provide all powers allowed by law.  Neither guarantees that your agent will have sufficient authority with which to preserve your estate if you need public benefits.

We strongly urge you to consult with one of our attorneys prior to executing a Power of Attorney.  An improper Power of Attorney, or one that is executed without a full understanding of its authority, can grant too much power and control to the agent in some respects and not enough power in other respects.  Of all the estate planning documents, this is the most complex and powerful tool.  Caution should be exercised and expert legal advice should be sought.

Regardless of the size of your estate or whether you are married or unmarried, every adult should execute an Advance Health Care Directive (formerly known as a Durable Power of Attorney for Health Care).  This document is included as part of your comprehensive estate planning documents.  The Advance Health Care Directive is used to appoint a family member or friend to make health care decisions for you if you are physically or mentally unable to make those decisions yourself.  This document is more comprehensive than a living will or a directive to physicians, and could help to avoid a conservatorship of your person.  In this document, you may direct how much, how little, and the types of medical treatment you want your agent to facilitate.  For example, you may include details about comfort care measures, whether nutrition and hydration should be provided, when treatment should be halted, or whether your religious tenements restrict certain treatments like blood transfusions.  The agent’s authority to take action is triggered only by a determination that the patient lacks mental capacity as determined by the patient’s primary physician.