Estate planning can be a little confusing. Many people aren't sure about what the legal terms mean and because of it, they can get into some trouble. That it is why it is important that you understand some important legal terms pertaining to estate plans and your estate. Here are some of the more common legal terms and what they mean.
The word intestate means that a person died without an estate plan. If you don't have a will or a trust in your name, then you have died intestate which means that the state decides everything that happens with your estate and with your minor children. The state has specific rules that they need to follow when it comes to dividing an estate, and appointing guardians for minor children. It is estimated that about half of American's don't have a will. This means that if they pass away they will die intestate, and the state will determine the division of their estate.
Historically speaking wills, were the best way to organize your estate. However, now there are things called trusts, which are far better. This is because every will has to go through a process called probate. Probate is when the will is executed. Probate can take a very long time, depending on the terms of the will, if anyone disputes the will and a variety of other factors. Thus, probate only applies to a will, not a trust.
A trust is like a special account where you can title everything that you have. This trust can bypass probate so that when you die, your estate that is in the trust can be awarded immediately to your beneficiaries. This is why many people choose to put their assets and property into the trust.
A personal representative, or the executor, is the person who has been appointed to oversee the execution of the will.
The trustee is the person who has been appointed to oversee the distribution of your trust. This should be a person that you trust. It can also be a beneficiary of your trust.
Power Of Attorney
When you create an estate plan, you will have to appoint someone to be your power of attorney. This is the person who will make all the medical, legal and financial decisions for you if you are unable to. For instance, if you are in a coma, someone will need to still make decisions about your health care, bills, estate, etc.
By understanding these legal terms you can be sure that you understand your estate plan. For more information, contact Flaccus Law or a similar firm.