Legal Protections Your Loved One Should Know About
A will instructs how people want their property to be allocated after they die. Whether or not someone has a will, their estate may need to go through probate, which is the court-supervised process that transfers some types of property from an estate to the will's beneficiaries. It may take six months to several years to complete, depending on the estate’s complexity. Many people seek to avoid probate to keep details of the estate private. Several strategies make this possible including trusts, joint tenancy with right of survivorship and life insurance payable directly to beneficiaries. Visit our estate planning area for more on wills.
Revocable Living Trusts
Like a will, this written document directs how a person’s property will transfer after their death. It also lets them choose a person to manage their assets and distribute them after their death. Unlike a will, however, trust property can go promptly to the beneficiaries without going through the probate process. Trusts also differ from wills in that they can take effect during the parent’s lifetime, when he or she becomes unable to manage the property in the trust. The person creating the trust must also legally transfer the property they want to be managed through the trust. They will need to talk with a lawyer about whether a trust or a will, or both, are appropriate for their circumstances. Learn more about living trusts.
Bank Account Access
Parents may want to make an adult child or loved one an authorized agent — but not a joint owner — of their bank account so that he or she will act for them in an emergency. They may also want to give a family member authority to have access to their safe deposit box.
Durable Power of Attorney for Finances (DPOA)
This document allows a person to give someone the authority to make financial decisions on their behalf. Without a DPOA, the court may need to appoint a spouse, close relative or companion to manage the person’s financial affairs as a guardian or conservator if they become unable to do so. Typically, a DPOA goes into effect as soon as it is signed, but a date or event in the future can be specified, such as when a doctor certifies that their patient has become unable to make financial decisions. Get more information on the power of attorney process.
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Published with permission from AARP