By:\u00a0 Pankhuri Gupta For The Law Offices of Lisa C. Bryant, Inc.<\/p>\n

Having an estate plan<\/a> is critical to ensuring the right people are in place should you ever be unable to take care of your needs. \u00a0Additionally, an estate plan memorializes your intent and provides detailed instructions regarding who should inherit from your estate when you pass away. \u00a0A power of attorney and living trust<\/a> are the backbone of proper estate planning and work together to eliminate issues that may arise as a result of aging, incapacity or death.<\/p>\n

A power of attorney is a legal document that allows a person to appoint an agent to manage their financial affairs if they are unwilling or unable to do so themselves. \u00a0A power of attorney can be \u201cimmediate\u201d or \u201cspringing.\u201d \u00a0An immediate power of attorney takes effect from the date it is signed. \u00a0A springing power of attorney takes effect upon incapacity and requires a doctor\u2019s note to become effective. \u00a0If you fail to make a power of attorney and become incapacitated, your family may have to obtain a conservatorship<\/a>. \u00a0A conservatorship is a costly and time-consuming court process where the court appoints a representative to manage the finances and often the healthcare decisions of the incapacitated person. \u00a0A power of attorney is essential to avoid a conservatorship.<\/p>\n

A living trust can also help your family to avoid a conservatorship during life, and probate at death.\u00a0 It is a revocable legal document created by a person, known as the trustor or settlor, during their lifetime.\u00a0 A trustor may change or amend their living trust as they wish so long as they have capacity. \u00a0In times of accidents or incapacity, a living trust gives the successor trustee authority to step in and manage assets that belong to the trust.<\/p>\n

The living trust allows the trustor to state how they wish their assets to be distributed when they pass away. \u00a0Upon death, the trust is managed by a successor trustee and transferred to the beneficiaries according to the trustor\u2019s wishes and without court supervision. \u00a0If you fail to create a living trust, any real property worth more than $50,000 or other assets with a value greater than $150,000 will be subject to probate upon death.\u00a0 Probate is a court process through which a deceased person\u2019s estate is distributed and any debts are paid. \u00a0Probated property is not readily accessible to its beneficiaries (distributions often take a year or more) and provides less privacy because of the required court supervision.<\/p>\n

As important as both the power of attorney and living trust are on their own, both are necessary because they serve unique functions.\u00a0 A trustee only has authority over assets that are assigned to the living trust. \u00a0A power of attorney gives the agent authority to manage all assets that do not belong to the trust. \u00a0It also allows the agent to deal with the principal\u2019s creditors, tax matters, and retirement accounts. \u00a0A power of attorney, however, ceases to exist upon the principal\u2019s death, and the agent loses all authority to act on the principal\u2019s behalf. \u00a0As a result, it is important to keep most assets in a living trust. \u00a0Having these documents in places and knowing how they work ensures that you and your family can tackle any foreseen and unforeseen challenges life may have in store.<\/p>\n

All materials have been prepared for general information purposes only to permit you to learn more about our firm, our services, and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, and may be subject to change without notice.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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