In creating an estate plan, you are proactively taking steps to ensure that your assets will be distributed according to your wishes in the wake of your death.
One tool available to you in estate planning is known as a trust. There are numerous kinds of trusts. If you wish to maintain control, during your lifetime, over the assets you place in a trust, you may choose to establish a revocable, or “living” trust – most likely, along with a pour over will in your estate plan.
First, What Is a Living Trust?
A living trust is a strategy in estate planning. When you create a living trust, you set certain assets aside within it. This might include things like a vacation home, a bank account, or an art collection.
With a living trust, you have the flexibility to modify or dissolve it at any point in your life.
How Do Living Trusts Work?
When you place assets into this type of trust, you continue to have access to those assets. You can select a designated individual, called a trustee, who would serve as the manager of your living trust should you pass away or ever become unable to manage your affairs.
For example, you may become incapable of handling your property, finances, and other aspects of your life if you fall ill, suffer from dementia, or endure an injury or accident that renders you unable to communicate. Should you die or become incapacitated, the trustee you have chosen manages the living trust on your behalf, following any terms you have outlined in the trust document.
Assets in your living trust are distributed to your beneficiaries, according to your wishes – typically without having to go through probate. This is often seen as one of the main advantages of a living trust.
For one, depending on your state and the size of your estate, the probate process can last several months to a year or more.
Avoiding probate also means that information about the distribution of your assets to your loved ones is kept private. This could be helpful if you have people in your life from whom you would prefer to shield the details of your estate, such as children from a previous marriage or estranged or combative family members.
However, perhaps you acquired new assets, such as an investment property, a bank account, a car, or valuable furniture or jewelry, after setting up your living trust. You may not have transferred them just yet. This is where establishing what is known as a pour over will can be an important piece of your estate plan.
What Is a Pour Over Will in an Estate Plan?
A pour over will is a type of estate planning document. It works in concert with a living trust and goes into effect if you become incapacitated or pass away. In such a scenario, this document ensures that any assets you had not transferred to your existing living trust are directed (or “poured over”) to it.
A pour over will in an estate plan ensures that your assets are ultimately passed on to your beneficiaries as you intended. In addition, information about the distribution of any of your remaining assets, once moved to your living trust, will be kept confidential as part of the trust.
Note that laws can depend on the state, so it is important to consult with an experienced estate planning attorney at Elville and Associates when setting up any estate planning documents.
Do Pour Over Wills in an Estate Plan Mean You Avoid Probate?
Not necessarily. While the property controlled by a pour over will in an estate plan eventually goes to your living trust after your death, that does not mean your family avoids probate. Before your assets are owned by the trust, they may first need to pass through the probate process. The regulations can also vary according to the state; in some states, for example, if your probate property is valued below a specific threshold, it is possible it could pass through probate more quickly.
If you want to avoid the probate process, you must ensure that your living trust has all of the assets in it that you wish to pass on to your beneficiaries. Essentially, a pour over will acts as a kind of backup.
Seek the Advice of an Attorney at Elville and Associates
Note that laws governing trusts and estates can be complex. Living trusts and pour over wills are also not suitable for everyone’s situation. It is important to consult with a qualified estate planning attorney when setting up any estate planning documents.
Knowing where to start to create an estate plan can be intimidating, but help is available and there is nothing to fear. Consider a free consultation with the experienced estate planning attorneys at Elville and Associates to get the process started. Consultations are the most ideal and best way to get your specific questions answered, have your attorney fully understand your situation, and help create solutions and a path forward for you. Contact us today to get started.
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Does a Power of Attorney End at Death?
A power of attorney is a powerful planning document that enables you (the “principal”) to give another person (the “agent” or “attorney-in-fact”) the power to act for you while you are alive.
Because it is often prepared in the context of estate planning, many believe it gives their agents the power to continue acting after their death.
Although every state’s laws and forms vary, most power of attorney forms specify that the agency relationship created by a power of attorney ends upon a person’s death.
What Does a Power of Attorney Do?
A power of attorney (POA) can convey a significant range of power to the person you appoint. This includes the ability to do the following on your behalf:
- Enter into real estate transactions;
- Enter into leases and purchase personal property;
- Buy bonds or other securities;
- Engage in banking transactions;
- Engage in business operating transactions;
- Handle insurance transactions;
- Engage in estate transactions;
- Make decisions concerning any claims you have or in which you may be involved;
- Make gifts or charitable donations;
- Manage any benefits you receive or are entitled to;
- Manage the financial aspects of your health care;
- Manage your retirement accounts;
- Handle your tax matters;
- Delegate any of the above responsibilities to a third party
Power of Attorney Forms
Most POA forms allow you to choose how specific or broad you would like the powers you give to be so that you can tailor a power of attorney to suit your needs. An agent can also update a power of attorney over time as a principal’s needs change.
In many states, these powers, once delegated, remain in place even in the event of your incapacity. People frequently execute a power of attorney for this reason. They do not want to worry about what may happen should they become incapacitated or whether a loved one will have the ability to handle their affairs if they are no longer able to do so.
Does a Power of Attorney End at Death?
That being said, a power of attorney does end at death. So, if you have entrusted a particular person with carrying out certain functions on your behalf while you were alive, those abilities cease when you pass away.
If you wish for the same person to continue handling your affairs after you die, you would need to specify they serve as the executor or personal representative of your will or trustee of your trust.
If you are concerned about maintaining continuity or making sure a particular person oversees your affairs upon your passing, be sure speak with an estate planning attorney at Elville and Associates. Every person’s situation and needs. Knowing where to start to create a customized estate plan – which includes powers of attorney documents – can be intimidating, but help is available and there is nothing to fear. Consider a free consultation with the experienced estate planning attorneys at Elville and Associates to get the process started. Consultations are the most ideal and best way to get your specific questions answered, have your attorney fully understand your situation, and help create solutions and a path forward for you. Contact us today to get started.
In the wake of the pandemic, rising inflation, mass shooting tragedies, and other events, more people recognize that they need to plan for the future. Yet while financial planning has been at the top of many Americans’ minds, a vast majority of people have stalled in creating an estate plan.
According to a new study completed by Caring.com, a mere one in three people has an estate plan in place. Worse yet, more than 40 percent of those without a will report that they wouldn’t create an estate plan until they had encountered a serious health concern.
Why Is It Important to Make an Estate Plan Sooner Rather Than Later?
It is simply dangerous to wait until you have a health issue before you create an estate plan. Without one, you could potentially lose control over your money, property, health care, and, in some circumstances, the guardianship of your children. In addition, your loved ones may not receive the assets, property, or sentimentally valuable items you would have wanted to pass down to them after your death.
Depending on what health condition or acute injury may unexpectedly befall you, you may be unable to speak, understand others, or advocate for yourself. Part of the purpose of advance planning documents, such as a health care directive, is to maintain your bodily autonomy and express your wishes when you cannot.
Bottom line: The reason to create an estate plan is to put protections in place not only for you, but also for your loved ones.
Barriers to Advance Planning
Despite understanding the need for estate planning, with 64 percent of people saying they believe it is important, most have not made it a priority. In the 2023 study, Americans reported procrastinating to create an estate plan for the following reasons:
- 35 percent do not believe they have enough money or assets to leave behind
- 14 percent said that inflation’s negative effect on their assets has made estate or financial planning less of a priority for them
- 15 percent reported that they did not know enough about estate planning, so they felt too intimidated to start
- 42 percent stated they want to begin estate planning, but simply have not gotten around to it
When Should You Create an Estate Plan?
Every American adult should create an estate plan, and it is virtually never too early to go about setting one up.
In fact, once a child turns 18 and legally becomes an adult, they are entitled to make their own decisions regarding their medical care, finances, and education. In gaining legal authority over those parts of their lives, they should consider setting up an estate plan.
For high school graduates, the months prior to moving away to college can be an ideal time to look into getting these kinds of documents in order. At first glance, this may seem overboard to some; however, nothing could be further from the truth. Keep in mind the wide diversity of family structures.
For example, perhaps a young person would want their property to go to a younger sibling, rather than a stepparent. Similarly, an individual might want the grandparent who raised them, not a parent, to assume decisions over their medical care in the event of an accident.
In the Caring.com survey, 69 percent of the study respondents said they believe that people should create an estate plan before they reach age 55. Despite that, less than half of Americans 55 and older have at least one estate planning document.
Many Americans Will Wait to Make an Estate Plan Until It’s Too Late
Many Americans are at risk of waiting until their health is compromised to seek estate planning advice or draft any documents. According to the study’s findings:
- 41 percent of respondents said they would not worry about creating a will unless they received a medical diagnosis or had a health scare
- 21 percent would wait until retirement age
- 22 percent said they would not create an estate plan unless they bought a home
- 20 percent want to wait until they are married or have children
- 14 percent would create an estate plan if their employer offered the benefit
Although each of the above reasons may seem valid, it is important to be prepared before any of these life events occur. Otherwise, it may be too late to act and create an estate plan.
What Are Some of the Key Estate Planning Documents?
Among the most important documents you may consider securing include:
- a will, through which you can specify who will receive your property and who will become guardians of your minor children after your death
- an advance directive, in which you name a person who will carry out your wishes regarding your medical care if you are incapacitated
- a power of attorney, which gives you the ability to name someone you trust to act on your behalf in certain situations if you are unable to do so
Additional Resources
Knowing where to start to create an estate plan can be intimidating, but help is available and there is nothing to fear. Consider a free consultation with the experienced estate planning attorneys at Elville and Associates to get the process started. Consultations are the most ideal and best way to get your specific questions answered, have your attorney fully understand your situation, and help create solutions and a path forward for you. Contact us today to get started.
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Webinar — Supported Decision Making for Loved Ones With Disabilities – Breaking Through 2.0
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March Is Developmental Disabilities Awareness Month – and Supported Decision Making Is Taking Off in Maryland
By: Stephen R. Elville, J.D., LL.M. – Managing Principal and Lead Attorney – Elville and Associates, P.C.
Do you know someone with developmental disabilities? If not, you probably know someone who does. And even if that’s not the case during this Developmental Disabilities Awareness Month, you most likely will somewhere along your life’s path. Why do I ask? Because whether you already know someone with disabilities or not, it is important to remember that they have rights just like you and me, and have always had such rights, it’s just that those rights and the ability to exercise capacity and self-determine were not always recognized legally (and clearly). By way of the new Supported Decision Making law, Maryland now recognizes the rights of individuals with disabilities to direct their own lives and exercise capacity and self-determination. This includes persons young or old with disabilities. For an in-depth discussion of this issue please see my article from June 2022 by visiting here.
But in summary, what is Supported Decision Making in Maryland? In my view, Supported Decision Making (SDM) is the ability of a person with disabilities to make their own decisions to whatever extent possible, provided that they have the support to do so (mainly with the support of their supporting decision maker). As you become familiar with this new Maryland law, notice that the person with disabilities is the person who retains their right to make their own decisions and does not yield this right to anyone else. Again, we might say “I can make my own decisions to whatever extent possible, providing that I have the support to do so.” SDM challenges (and changes) old notions and paradigms of incapacity and capacity. Further, as you gain an understanding of Supported Decision Making in Maryland you may ask “Where does the new SDM law begin and where does it end?” – the law is so broad in scope. Well, it’s no secret that some persons with disabilities will understand their new rights of self-determination, while others will not. It is also true that parents and other loved ones of a person with disabilities may embrace the possibilities of Supported Decision Making, while others will not, or remain skeptical.
But regardless of our current understanding of Supported Decision Making in Maryland and its application, what’s important to remember during this Developmental Disabilities Awareness Month is that like a new jet airliner flying to its destination, this new Supported Decision Making law has just lifted off the runway and is climbing to altitude for its long-term journey. Our job is to learn what Supported Decision Making in Maryland really is, including its broad application, and to go along for the ride as persons with disabilities (and those with intellectual disabilities) are now recognized and empowered like never before under the law.
Elville and Associates’ Managing Principal and Lead Attorney Stephen Elville’s work is centered in special needs planning, elder law, and estate planning with special emphasis in the areas of tax planning and asset protection. As a member of the Academy of Special Needs Planners, the National Academy of Elder Law Attorneys, and the National Network of Estate Planning Attorneys, he works to bring peace of mind to clients by creating solutions to their needs through counseling and education using the very best legal-technical knowledge available. He is a seasoned speaker and each year presents at dozens of webinars, workshops, conferences, and continuing education events. Steve has also been named to the Maryland Super Lawyers list eight times, including the past seven consecutive years. Steve is also the founder
and president of the firm’s charitable organization, the Elville Center for the Creative Arts, in 2014, a 501(c)(3) organization that partners with school music programs and other organizations such as the Annapolis Symphony Orchestra to give the gift of music to children who want to participate in music but don’t have the means to do so on their own. Steve may be reached at steve@elvilleassociates.com, or by phone at 443-343-8708 x108.
Presented by Elville and Associates’ Managing Principal and Lead Attorney Stephen R. Elville, webinar attendees will come to understand what is involved in the planning process for a special needs family and the importance of preserving your loved one’s financial security and quality of life.
The key issues of understanding the role of public benefits, making decisions about the future, Maryland ABLE, and using estate planning and trusts to protect assets will be discussed along with the types of special needs trusts and their specific purposes (along with who the decision makers and beneficiaries can be in these trusts). Also, to be touched upon will be the “planning team concept” – how your planning team (attorney, financial advisor, CPA) – can work together to help provide your family peace of mind during the special needs planning process.
More Webinars from Elville and Associates
The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates. We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.
#elvilleeducation #elvillewebinarseriesMany critical mistakes can occur when planning for a loved one with special needs, along with the perils that exist for persons with disabilities when no planning is implemented for them.
Bill Hufnell, Founder and Principal at Bay Point Wealth, and Stephen R. Elville, Managing Principal and Lead Attorney of Elville and Associates, discuss the biggest mistakes in special needs planning, what the ramifications are, and how to overcome and avoid them.
More Webinars from Elville and Associates
The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates. We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.
#elvilleeducation #elvillewebinarseriesConnect with us
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