Monthly Archives: March 2019

Will vs. Trust

When I meet with a new client, we almost always discuss the differences between a Will and a Trust. Frequently, an individual assumes that: Will = simple; Trust = complicated and Will = affordable; Trust = not so affordable.  Fortunately, such is often not the case. A Will and a Trust really do different things—or at least address the same matters in much different ways.

A Will directs where someone’s property (accounts, home, car, personal belongings, etc., etc.) goes when they die.  For this to happen, a probate estate (court supervised process for handling the affairs for a deceased person) needs to be opened and a personal representative handles the administration of the probate estate.  Initial cost of a Will is often a bit less expensive but final administration is more time consuming, more involved and can also end up more expensive.

A trust generally functions as a functional replacement for a Will.  A trust’s unique virtues include avoidance of probate and the opportunity to provide ongoing support or distributions to named beneficiaries.  While initial cost is often a bit more than a Will, its final administration is dramatically easier, less time consuming, more private and often less expensive.

While every individual, family and situation is unique, it is generally true that a trust is a superior planning tool to a Will. However, I work with clients for whom a Will is the best fit and that’s what I prepare. For others, a Trust makes the best sense.  Ultimately, these important determinations are based on a person’s needs, preferences, goals and unique personal and family situation.

What’s a Power of Attorney? What is a General POA vs. a Healthcare POA?

A power of attorney grants someone (called the “attorney-in-fact” or “agent”) authority to act on your behalf. Generally, this document would be prepared in contemplation of a future period of mental incapacity. A power of attorney may give someone authority in the area of financial, legal and business matters.  This is called a “general power of attorney” or a “financial power of attorney.” Of course, the specifics of this type of document can vary substantially.  A power of attorney may give someone authority in the area of medical and healthcare matters.  This is called a “health care power of attorney” or a “medical power of attorney.” The people named in these roles may be the same for each document or you may elect to name different people for each role.

The purpose of power of attorney documents is to (i) reduce ambiguity, (ii) allow for quick and clear opportunities for people to step in and help and (iii) eliminate the necessity of costly legal procedures. Not having power of attorney documents in place in advance may lead to the need for drawn out legal processes and significant ambiguity about who you want in that role and what limitations or specific directions you want to include with even court-appointed authority.  Given that preparing a power of attorney is fairly easy and is not very expensive, I recommend these documents for nearly every client.