TRUST AND ESTATE PLANNING TOPICS
 
 
Question:  What is a trust?
 
Answer:  A trust is a declaration by a person known as the settlor stating how his or her property should be administered in the event of a disability, illness, or death.  The person named to administer the trust is known as the trustee.  Often, the settlor acts as the trustee, and when a triggering event occurs, such as disability or death, a successor trustee is named to continue the administration of the trust for the benefit of a surviving spouse or children. 
 
Question:  What are the advantages of declaring a trust?
 
Answer:  A trust allows another person, known as the trustee, to control property and distribute funds when the settlor is not personally able to do so as a result of disability, incapacity, or death.  A trust usually avoids the necessity of a probate case if the trust is properly prepared.

Question:  How is a trust typically used?
 
Answer:   Often, a trust provides that the property of a husband and wife will be used to support the surviving spouse after the death of the first spouse.  After the death of both spouses, the remaining property may be distributed to children or other beneficiaries named in the trust.  The administration of a trust does not usually require court proceedings.   
 
Question:  What is Asset Protection Planning?
 
Answer:  The subject of Asset Protection Planning generally means planning ones financial affairs to protect particular assets from particular types of creditor claims.  Various techniques are used depending on the client's situation, ranging from the use of business entitities (such as  corporations or limited liability companies) to converting non-exempt assets to assets that may be exempt from execution for the particular type of creditor claim.
 
Question:  What is a Will? 
 
Answer:  A Will is a document that must be executed with certain legal formalities, and it sets forth the beneficiaries of a decedent's estate.  A Will takes effect at death.  Wills are the subject of a court supervised probate court proceeding.  
 
Question:  What is Estate Planning? 
 
Answer:  Estate Planning is the practice of planning for the disability or death of the client and the succession of property and business interests. Estate Planning includes the preparation of documents such as a trust, Power of Attorney, and an Advance Health Care Directive.  Estate Planning also concerns the disposition of retirement assets, such as IRA and pension plan  accounts.  Estate Planning addresses the issue of minimizing the Federal Estate Tax.  Estate Planning can protect the surviving spouse and the children of the parties, including children by prior relationships of each party.  Careful drafting is required to meet the requirements of each client.  There is not an all-purpose estate plan or all-purpose trust for all persons.

Question:  What is an Advance Health Care Directive?

Answer:  An Advance Health Care Directive allows a person, known as the agent, to make healthcare decisions for another person, known as the principal, if the principal is unable to do so due to illness or incapacity.  An Advance Health Care Directive can describe the type and manner of medical care the principal wishes if he/she cannot make decisions for himself/herself. 

Question:  What is a power of attorney?

Answer:  A power of attorney is a document by which one person, known as the principal, grants to another person, referred to as the agent, the power to make decisions and enter contracts on behalf of the principal.  A power of attorney can include provisions that make the power of attorney durable.  In other words, the power of attorney will continue to be effective even if the principal becomes mentally incompetent.  An advantage of a durable power of attorney is that it may avoid the necessity of a conservatorship for a person who has become mentally incompetent.  A power of attorney can be drafted so that it is either narrow or broad in scope. For example, the power of attorney may only give the agent a power to deal with a particular business or a particular transaction, or it may be limited to contracts concerning a particular parcel of real property or particular items of personal property.  The power of attorney can be drafted with broad provisions allowing the agent to buy and sell securities, to purchase or sell real estate, or engage in almost any other transaction on behalf of the principal.  There are other statutes governing the creation of a power of attorney for healthcare decisions.