Revocable Living Trust

Through your revocable living trust, you name the beneficiaries who get your assets after your death.  As the name implies, you create it during your lifetime and, as long as you are alive, you can revoke or amend it whenever you wish.  A trust avoids probate at death, meaning that you avoid: (a) the delay of probate court, where your assets could be tied up in the court process for over one year; (b) statutory probate fees (for example, $26,000 on the first $500,000 in gross assets or $46,000 on the first $1 million in gross assets); and (c) the loss of privacy that comes from the requirement that your executor file a public record with the court detailing every single one of your assets and liabilities.  A trust also authorizes the trustee to manage the property and use it for the benefit of you (or your loved ones) if you should become incapacitated or if you die.

Will

Through your will, you can also name the beneficiaries who get your assets after your death.  However, a will must be probated through the court.  Your will names an executor who caries out your wishes after you die.  Your will may also nominate the guardian(s) of your minor children.

Financial Power of Attorney

Through your financial power of attorney, you name an agent who has the power to make all your financial decisions for you should you become incapacitated (i.e., you are unable to make those decisions for yourself).  Such decisions range from paying your ordinary household bills to managing your financial portfolio and taking care of you (or your loved ones).  Without a financial power of attorney, your family may be required to obtain a court-supervised conservator to manage your financial affairs.  A power of attorney terminates upon your death.

Advance Health Care Directive

Through your advance health care directive, you name an agent who has the power to make all medical decisions for you if you become incapacitated (i.e., you are unable to make those decisions for yourself).  The agent’s power is guided by your instructions regarding end of life decisions.  End of life decisions are a very personal choice.  Some people instruct their agent to do everything humanly possible to keep them alive no matter what the probability of recovery or other extenuating circumstances.  Others provide instructions that, in case of a terminal illness, they do not want their life to be artificially prolonged by CPR, or the use food, water or air tubes.  In fact, you may request the use of pain medication to the fullest extent possible, even it is hastens your death.  Through your advance health care directive, you may also set forth funeral, memorial and burial instructions.