It cannot be stressed enough how important effective estate planning is. A person who does not develop a plan for the disposition of his assets runs the risk of their not being passed to the intended beneficiaries. The living trust and power of attorney are two effective tools in estate planning that serve somewhat different purposes. If you have not already set up an estate plan, consult with a College Station estate attorney today.
Living trusts are very useful tools that give you considerable flexibility. Any assets that you place within the trust are thereby set out of reach of probate, bankruptcy courts, and debt collectors. This is because the assets no longer belong to you. One of the great benefits of the living trust is that you can manage it while you are alive, adding assets to it and adding/removing named beneficiaries. You can be the trustee while you are alive, and name a successor trustee for when you die. This individual manages the assets held in trust and distributes them in accordance with the instructions you provide.
Power of Attorney
Power of attorney is given to an individual to make financial and other decisions on your behalf. You can grant general powers of attorney, which gives the named person expansive powers to make such decisions. You can also establish powers that are specific. This is very useful in case you become incapacitated at some point. The person appointed is termed the attorney-in-fact. If, for instance, you fall seriously ill and can no longer handle your own affairs, the attorney-in-fact can do so. If you grant special powers, the person can also make decisions about your health, such as DNRs (do not resuscitate orders). You can combine the special power of attorney provision with your living trust.
As should be evident from the enormous authority granted through power of attorney, you need to take great care in whom you appoint. You may decide upon a son or daughter, for instance. It is not a good idea to name someone who is a beneficiary of the living trust, however, if the power of attorney is tied into it.