What is the Purpose of a Power of Attorney in Estate Planning?

There are many aspects to consider when planning your estate such as living wills, last will and testaments, trusts, beneficiaries, and so on. While all of these moving parts work together to create a successful estate plan, the power of attorney (“POA”) is one of the most significant of them all. This is because without this document, many of your assets may go unprotected in the event that you cannot manage things on your own.

If a POA is not named, and you are in an unstable condition, you will not have access to your assets unless they go through a guardianship proceeding with the courts. These proceedings can be very costly and time consuming, and you do not have the freedom to choose who that guardian may be. Appointing a power of attorney gives you this protection, and also allows you to take advantage of tax reduction.

A Power of attorney is always necessary, even in the case of joint ownership. These laws have changed dramatically within the last ten years, and documentation must be updated and checked on regularly to make sure they are in alignment with the new legislation. Call us at Gulati Law for a free legal checkup to find out the status of your estate plan and what we can do to ensure a smooth process.

estate planning

Trust v. Will

trustEstate planning for you and your family can be a stressful task. One of the main questions that come up during Estate Planning is:

Do I need a Trust or a Will?

Wills are generally the easier of the two to set up. Even though it is the easiest to set up, it still has its drawbacks. Trusts are a great device if you are looking for privacy and greater protection, however they entail more work and costs.

Here are some more pros and cons:

  •  A revocable living trust is a private contract between the trust maker and trustee(s). However, a will has to go through probate, which of course is public record and anyone can read your last Will and Testament, list of beneficiaries and assets, and the breakdown of who gets what. This is not the safest way to protect your heirs, as public knowledge of inheritance can cause a lot of headache.
  • Another benefit of a revocable living trust is that you have the ability to plan your mental disability planning. This is a great protection if you or your spouse becomes incapacitated.
  • The main benefit of a revocable living trust is that you can avoid probate.
  • Trusts are considered their own legal entity in a sense, so you will have to change the name on registrations, deeds, and set up new bank accounts, if you want them to be part of the trust.

As you can see Trusts and Wills have both benefits and drawbacks. But, here is the real twist to trusts that most do not realize, you still should have a will drafted. Yes that’s right a will. Most people believe if you have formed a trust, you do not need a will. That is not completely true, because a trust takes time to draft and transfer to become valid, the will is an intermediary protection during this process.

If you have any more questions regarding Estate Planning for your future, please contact us today, we will be happy to help.

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    Gulati Law