Wills: Who should have one?
In short, everyone.
Wills complement and support living trusts—or they may stand alone. Every estate plan should include a will. For example, a will is where you designate who will be the guardian of your minor children. Sometimes, if your assets are worth under $150,000, you may only need a will. In that case, in addition to choosing guardians for your minor children, you can also spell out how and when they get their inheritance, just like in a living trust.
If you don’t have a will, your assets will automatically go into probate, and anyone who has an interest in your will would have to petition the court to be the executor of your estate. Creditors—people you owe money to—are the first in line, followed by your children, parents, siblings and other relatives in that order, regardless of the deceased person’s wishes. In one case, a daughter who was estranged from her mother received the entire estate even though it was clear from the mother’s statements that she wanted her own brother to inherit.
Pourover Wills: Making sure all your assets go into your trust
Wills associated with trusts are often called “pourover” wills because, if there are assets that were not transferred to your trust, the will can “pour” them into the trust without the need for court proceedings. It acts as a “safety net” for any assets that haven’t been included in your living trust at the time of your death.
Living Wills: How you want your life to end
Living wills are not the same as living trusts. And they’re not legally wills. A living will tells only how you want to be treated when you can no longer make your own healthcare decisions. Many attorneys use the terms “advance healthcare directive” or “durable power of attorney for healthcare” instead of “living will,” so as not to invite confusion between living wills and living trusts. The three terms cover essentially the same legal ground. For many of us, the quality of our life as it nears its end is the most important part of estate planning.
In living wills, healthcare directives or similar documents, you will designate who will make medical decisions for you if you are unconscious or mentally incapacitated. The living will contains instructions for that person. Do you want to be kept on life support if there is no medical hope for your recovery? How much medical intervention do you want in your final days? Feeding tubes? Assisted breathing? Is it important for you to be at home if at all possible? These are the subjects of living wills.
Such documents are often offered by your hospital when you go in for surgery. Or you can create one in advance with the help of your attorney or by using a standard form from your state medical society. Who should have a copy of the healthcare directive or living will? Your doctor and your successor trustee or whoever you designate to make those healthcare decisions for you.
To attend a free estate planning seminar to learn more contact Bridget Mackay at Bridget Mackay Law in Petaluma. We also serve the surrounding areas of Novato, San Rafael, and Santa Rosa.