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Introduction to Wills, Trusts, Powers of Attorney, and Estate Planning

We often hear the term "estate planning," – and time and time again, we are told how vitally important it can be to us and our families – but what exactly is estate planning? Essentially, it is the legal process which allows an individual or family to meet the following goals:

1. To ensure that, after your death, your assets and possessions are distributed in accordance with your wishes – to the loved ones and/or charitable organizations of your choosing.

2. If you are a parent, to nominate a Guardian to care for your minor children in the event of your passing or incapacity.

3. To appoint the person whom you want to handle your financial affairs and make medical decisions for you in the event that you cannot care for those matters yourself;

4. To make known your wishes concerning end of life issues (i.e.: "life support");

5. To minimize estate taxes to the greatest extent possible.

As you can see, these are vitally important goals. With these goals in mind, we can see that estate planning is truly important to ALL of us. The process is accomplished through the use of various legal documents, which we can think of as the building blocks of estate planning:

1. Wills

2. Trusts

3. Durable Powers of Attorney for Financial Matters

4. Advanced Directives (Health Care Powers of Attorney and Living Wills).

Depending upon your needs and situation, your estate plan will incorporate some or all of the above documents. In addition to these documents, property may be passed to a desired beneficiary through the use of other legal methods, including:

1. Accounts or other property which is held as "joint tenants with rights of survivorship;"

2. Accounts which are held "in trust for," or with the designation "payable on death" or "transfer on death;"

3. Beneficiary designations (for example: on life insurance);

4. Lifetime gifts.

Each estate plan should be tailored to the individual and should be custom-designed to meet his or her needs, and the needs of his or her family. In other words, when it comes to estate planning, there is no "one size fits all" solution. However, there are some basic principles of estate planning – and some basic information – which will be helpful for you to know. Let's start our discussion by considering what you need to know about wills.




PLEASE NOTE: This article provides general information. Laws develop over time and differ from state to state. This article does not provide legal advice about specific legal problems. Most of all, this article is NOT a substitute for legal advice. Rather, it is intended to whet your appetite for this topic, and give you some basic information. For more information about your particular situation, you should seek out the advice of an attorney. Please give Attorney Rutter a call at any time, to schedule an appointment to begin a discussion of YOUR estate planning needs!