Trusts & Wills
After someone passes away, their estate has to be probated. Or, if that person has a trust in place, the trust can operate as an instruction manual for the people who are left behind to then operate and carry out the wishes of the person who passed away.
If you have a will in place, then the will goes through the process, called probate, a judge goes through and makes sure that the will is valid and allows the will to work as the instruction manual to determine where all the assets and the different things are distributed to the different heirs.
They are two different mechanisms to do essentially similar things by taking all of an estate and dividing it up amongst the heirs or beneficiaries, whoever is designated in either that trust or that will.
What Is a Power of Attorney?
A power of attorney is typically used in estate planning production. Unlike most other estate planning documents that deal with things that are happening after someone dies, a power of attorney is an instrument that is used while someone is alive but not able to handle their own responsibilities.
It could be a situation where someone is traveling outside of the United States or an area where they're able to communicate effectively and they need to have someone to sign documents for them. A power of attorney could provide the ability for that person to do that type of task.
It could also be a situation where someone is incapacitated, without the mental ability to sign a document. A power of attorney could allow a person to sign or execute documents on their behalf. A power of attorney can be very broad in its scope, or it can also be very narrow depending on the need.
Be Cautious When It Comes to Probate
We've had a few different cases that have involved probate issues where individuals have either tried to draft something themselves, or they've taken a form that they've found on the internet and have tried to fill it out. When they have not done everything that they should have done, the children, or heirs, have ended up litigating over those things.
Unfortunately, those types of cases can drag on and become incredibly expensive. The people were initially just trying to save a few hundred dollars or up to a couple thousand dollars if they were doing some sort of irrevocable trust. By doing it themselves they end up costing their heirs tens of thousands of dollars in litigation costs.
Probate is one of those areas where an ounce of prevention is absolutely worth a pound of cure. If you can do things proactively on the front end and do them right, you'll prevent a lot of expense and heartache on the back end.