Estate Planning II
A Living Trust functions very much like a will which specifies what property goes to which beneficiaries. The advantages of a Living Trust are that it avoids probate, helps avoid estate taxes and it's private unlike a will which is public. It also includes "multiple age disbursement" which allows you to specify when financially unsophisticated heirs will receive their inheritance, allowing it to be distributed in stages at ages you choose.
Last Will and Testament:
A Will directs the dispostion of your assets at death. However, it doesn't avoid probate. As part of an estate plan, the Will is drafted as a "Pour-over" Will which "pours over" assets covered by the Will to a Trust thereby avoiding probate.
A Living Will is a document that allows a person to explain in writing which medical treatment he or she does or does not want during a terminal illness. A Living Will takes effect only when the patient is incapacitated and can no longer express his or her wishes. It states which medical treatments may be used and which may not be used. The purpose is to allow you to make decisions about life support and direct others to implement your desires in that regard.
Powers of Attorney:
Healthcare Power of Attorney
is a document that appoints someone else to make decisions regarding your medical care. If your health declines to the state that you can no longer communicate with others, the person named in your Healthcare Power of Attorney will communicate with your doctors and/or other healthcare providers.
Financial Power of Attorney
gives someone the authority to handle financial transactions on your behalf. It's designed to let your 'agent' manage all of your financial affairs for you if you become incapacitated.