Estate Planning encompasses the documents that enable people to direct their personal and financial affairs in anticipation of the process of illness, aging and dying. Estate Administration encompasses the legal processes by which a person’s assets are distributed after death, either pursuant to a Will (Probate) or pursuant to the state laws of inheritance (Administration).
Estate Planning helps you to decide and create legal documents to do the following:
Living Trusts: to protect and/or distribute certain property and assets while you are alive;
Wills and Trusts: to protect, administer and distribute your assets after you die;
Powers of Attorney: to protect, administer and/or distribute your property and assets should you become incapacitated. The person you name can make all decisions should you become incapacitated, and has the ability to access and use your assets for your benefit.
Living Wills and Health Care Proxies: to make health care decisions if you are unable to communicate with your doctor, including whether to stop or continue treatment when you are seriously and permanently incapacitated.
A comprehensive estate plan includes documents covering all the items in the above list.
Estate Planning includes several areas of law that you might hear referred to as:
Elder Law
The law of Wills
The law of Trusts
Estate Administration begins the moment a person dies and proceeds whether a person has engaged in Estate Planning or not. It encompasses the process by which assets are collected and distributed. Estate Administration can last from several months to several years, depending on the complexity of the estate, the ability of your Executor or Administrator to locate your assets and your family, and whether there are any disputes, such as a will contest.
A responsible person must make funeral arrangements. A death certificate must be obtained, and the body must be buried or cremated, as directed by the person who died (called “the decedent”)
The decedent’s assets must be located and collected for deposit in an estate account. In rare cases, police seal the decedent’s home, and papers must be filed to have it unsealed.
The Executor is responsible for filing the decedent’s Will in Court, collecting the decedent’s assets, paying creditors, funeral expenses, any applicable taxes, and, finally, distributing the remaining assets to the heirs as directed by the Will.
If the decedent died intestate, (i.e., without a Will), the court will appoint an Administrator to settle the estate. An Administrator has the same responsibilities as an Executor. The main differences between administration and probate are:
With a Will, you can name anyone to inherit your assets. Without a Will, the law dictates who will inherit.
Wills normally provide that an Executor can serve without purchasing a bond (i.e. an insurance policy). Without a Will, a bond must be purchased, at the expense of the estate.
Wills normally name a trustee who will handle a minor heir’s inheritance until he or she reaches any age that you direct. Without a Will, use of the minor’s inheritance is subject to court order, meaning that court permission must be obtained for every expenditure, at the expense of the estate, and the entire fund must be released to the minor at age 18.
Regardless of your situation or your age, an experienced estate and trust lawyer can help you create a comprehensive plan for the protection and distribution of your assets during your lifetime and after you die. A lawyer can help you make a will, create a trust, and make other legal arrangements that give you control over difficult health and financial decisions that may arise during your life and eventual death. A lawyer can also gather and preserve information necessary to help your Executor complete the administration of your estate as quickly and easily as possible.
Additionally, an estate planning lawyer can help advise you in the event you are involved in the estate of a family member or someone else who has died.
