What are some common terms related to wills?
Intestacy. Intestacy means dying without a will or a trust. Intestacy is actually an involuntary method of estate planning because dying without a will or a trust means that you have given the state the right to decide who is to receive your property.
Last Will and Testament. A last will and testament is your direction to the probate court explaining who you want to take authority over your property and how you want your property to be distributed at death. It is also the document used to name a guardian for minor children.
Joint Tenancy with Rights of Survivorship. One of the ways to own property is as joint tenants with rights of survivorship. Bank accounts or real estate may be co-owned and co-controlled by joint tenants while you are alive and well. Your property, if titled this way, passes without probate to the surviving joint tenant at your death.
Beneficiary Designation. Life insurance benefits, annuities, individual retirement accounts, qualified retirement plans and pension plans pass to named beneficiaries at your death. Beneficiary designations override any instructions you may give for disposing of these assets in your will or living trust. Generally, these assets do not pass through probate.
Power of Attorney. A power of attorney is often used as a “disability” planning tool. Authority to control, manage, and distribute property while you are living is given in a power of attorney to another person, or “agent.” A “durable” power of attorney is in effect while you are well and remains effective even if you become incapacitated. A power of attorney is no longer valid at your death and the agent loses authority to act on your behalf when you pass away.
Gifts. Giving assets away prior to death can be a valuable part of an estate plan if it is accomplished with appropriate professional advice.
Living Trusts. You can use a living trust to manage your property while you are alive and well, provide directions to others if you become mentally disabled, and distribute your entire estate according to a comprehensive plan without the need for probate.
What are some of the other advanced estate planning tools and techniques?
There are many different tools, strategies, techniques and special trusts that might be part of a sophisticated estate plan. These specialized tools require a trained and experienced attorney to assure that they are properly designed and implemented. Examples of these advanced tools include irrevocable trusts, life insurance trusts, asset protections trusts, charitable trusts, LLCs and family partnerships, qualified personal residence trusts (QPRTs), and grantor retained annuity trusts (GRATs) and generation skipping dynasty trusts.
If I have a will, do I need additional estate planning?
Wills are important tools of estate planning, and are crucial for parents who have minor children. Guardians for your minor children are named in your will. A will informs the probate court of your desires for disposition of property you own individually at the time of your death. Having a professionally prepared will is preferable to doing no planning or a do-it-yourself will. There are, however, a number of disadvantages to using a will as your primary estate planning tool. If you have a will, or want to use a will as your primary estate planning strategy, you should know that:
Can I prepare my own will without a lawyer?
Alaska Law allows an individual to prepare a last will and testament that will be legally valid if the entire document is written out in the handwriting of the decedent. Moreover, will forms are available in stores, or on the internet, or in software packages. Any of these options might be used to prepare a legally valid will. Foley & Pearson strongly advises against the preparation of wills or other estate planning documents without the help of a lawyer or competent legal advisor. We have seen many mistakes that have led to family conflict and strife when individuals have elected to save money by doing their own legal documents without professional assistance.
If all of my property is jointly-owned with my spouse or loved ones, why do I need further estate planning?
There are a number of drawbacks to relying on jointly-owned property as your primary estate planning tool.
What is the best way to handle beneficiary designations on life insurance and retirement benefits?
Most people will pass substantial wealth to their loved ones in the form of life insurance, annuities and retirement plans. These assets are controlled by beneficiary designations, not by your will or your trust. Consequently, it is critical to review beneficiary designations and keep them current to assure that these assets will pass to the right people, in the right way, at the right time. Common problems with beneficiary designations include: