We have talked about Durable Medical Power of Attorney and Durable Financial Power of Attorney. Now we need to talk about Trusts and Wills. Which document is the best for you? You do need to protect your assets. Again I encourage you to research these documents and understand them before you decided what is best for you. You must decided what your needs are.
A trust is a document that holds a persons property in a fiduciary relationship by one party for the benefit of another. The trustee holds title to the trust property. Beneficiary receives the benefits of the trust. There are many types of trusts: living trust, revocable trust, irrevocable, asset protection trust, charitable, constructive, special needs, spend thrift, tax by pass, trotten trust.
A revocable trust is called a living trust. It can be altered, changed, modified or revoked entirely. It is helpful in avoiding probate when one dies.
A irrevocable trust cannot be altered, changed, modified, or revoked after it’s creation
The many other Trusts I have not defined. They are listed on the internet for your research.
A Will is a document in which a person specifies the method to be applied to the management and distribution of his estate after his/her death.
A valid Will cannot exist unless three essential elements are present. .
1. There must be a competent testator
2. The document purporting to be a Will must meet the execution requirements of statutes, called Statue of Will designed to ensure the document is not a fraud
3. It must be clear that the testator intended the document to have the legal effect of a Will.
A competent testator is a person who is of sound mind or required age at the time that he/she makes the Will not at the date of his/.her death.
A Will must be in writing; it must be signed and witnessed.
Trusts and Wills can be combined and used. Next week we will discuss the combination of these two documents.