Frequently Asked Questions
Who needs a will? I'm not rich, so why would I need one?
Everyone who cares about the disposition of their assets at death should have a will, regardless of the amount of wealth you have. If you don't prepare your own will, the law provides default provisions (the law of intestacy). You also have the freedom to appoint people whom you trust to be your executor, trustee, and guardian of your children rather than leaving this up to the government.
What is a durable power of attorney?
This is a document granting legal authority to someone you trust to act on your behalf, especially during times when you are unable to do so because of illness, travel, or any other reason. You can also appoint an alternate agent to act on your behalf if the first agent is unable to do so.
Example: Bill and Ruth have been married for 52 years. Bill has recently been diagnosed with Alzheimer's Disease and Ruth is caring for her husband on a full-time basis. Ruth is not in particularly good health herself and, among other things, suffers from arthritis and poor vision. Before Bill became ill, Bill and Ruth had appointed their son, Bill Jr., as agent under a power of attorney to handle anything that either of them cannot or does not want to deal with. When Bill Jr. stops by to visit once a week, he goes over his parents' bills and finances, writes checks, and takes care of their affairs for them as their legal agent.
What is a medical or healthcare power of attorney?
This is similar to a regular power of attorney but is limited to medical and health-related matters. A "living will" is also incorporated into this document to provide instructions to your healthcare agent in the event that you do not want to be kept alive via artificial means for an extended time.
Example: Same as above, but Bill and Ruth want all of their children to be involved in any medical decisions. Bill and Ruth first appoint each other as their healthcare agent. In the event that they cannot serve or if one of them dies, they make alternate provisions for their children to take over this important function. Bill, Jr., his sister Patricia, and their brother Andrew are appointed as co-agents and all of them must consult with each other in the event that a healthcare decision needs to be made for one of their parents and that parent is unable to communicate.
How does a trust work?
There are many types of trusts. Very basically, a trust can be thought of as a container or briefcase for some or all of your assets. The "trustee" is the person or persons who holds the briefcase and has the authority to open it to get to the assets. The "beneficiary" is the person for whom the trustee must take care of the assets. Often, there are many beneficiaries, including perhaps you (the person who creates the trust), your spouse, your children, and your grandchildren. The trustee must strictly adhere to fiduciary duties established by law and must account to the beneficiaries if requested to do so.
Some trusts can be easily changed or ended while others are permanent. There are various estate planning advantages to creating and using trusts, including having your assets managed, privacy, continuity of financial management in the event of serious illness or death, tax savings, etc.
What is title insurance?
Unlike many other types of insurance policies that require payment of a premium on an annual or other regular basis, title insurance is a one-time premium paid at the time the policy is issued. Title insurance is required by almost all mortgage lenders in both residential and commercial real estate and protects both you and the bank against defect in the title to your home or other property.
Who gets your house when you die?
It depends how you "took title" to the property as evidenced in your deed. Many couples own their property as "Tenants by the Entireties", which means that the surviving spouse gets the house immediately when one spouse dies. Property is also often commonly owned as "Tenants in Common" or as "Joint Tenants with Right of Survivorship". The title to your property is very important and property rights are often determined by this language.
Example: Elizabeth is a widow. When her husband died, she downloaded a new deed prepared by ElCheapoLegalDocuments.com and recorded it at the courthouse. The new deed states that Elizabeth and her daughter, Victoria, own the house as joint tenants with right of survivorship. Elizabeth's will says that her assets, including her house, are to be divided between her daughter, Victoria, and her son, Albert, when she dies. Elizabeth dies with nothing but the house. Victoria gets the house immediately and totally and it does not matter that her mother's will says that Victoria and Albert are to divide the house equally. Albert's inheritance is 50% of zero.
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