1. What is an estate plan and do I need one?
An estate plan is a "plan" to handle your assets if you become incapacitated, and to distribute your assets at your death. A plan can be very simple, e.g., a Will, or involve one or more Trusts and related documents. Most people do need an estate plan. If you do need one, the type of estate plan you need depends on your assets and your ideas about whom should receive your assets at your death.
2. What is a will?
A will is the legal statement of a person's last wishes as to the disposition of his or her property after death. It instructs the probate court how to distribute your assets after all debts, taxes and costs of administration are paid.
3. Do I really need a will?
A will is a good idea for just about everyone. A will is a document in which a person declares what he wants done with his property at the time of his death. A will has no effect until the person who wrote it, known as the testator, dies. The testator can also revoke a will at any time before his death. If you die without a will, the state will distribute your property to your heirs according to the state's intestacy statutes.
4. What estate planning documents do most people need?
Medical Power of Attorney: This names a person to make medical decisions on your behalf if you are unable to do so. You can also authorize this person to discontinue (or not start) life support-like procedures, if you are terminally ill.
Durable Power of Attorney for Assets: This document enables the person named to deal with any if your property, as you would, during your lifetime.
5. What is the role of an executor?
The executor has three main jobs:
- Gather together the assets of the estate;
- Pay all the valid outstanding debts of the estate; and
- See that the estate is distributed in accordance with the terms of the will.
6. How often should I update my will or estate plan?
It is a good idea to update your will and/or estate plan every few years or after the occurrence of significant life events such as marriage, divorce, the birth of a child, or adoption. Even if you haven't experienced any of these events since you last updated, there may have been changes in tax laws or changes in your financial situation that necessitate a reevaluation of your estate plan.
