The estate planning process can be full of legal-ese and intimidating legal terms that cause some of us to drag our feet and convince ourselves that it will be too hard, or too expensive, to create a plan for what becomes of our assets when we pass away.
Here is a quick guide to some of the most common estate planning documents and what they do.
Last Will and Testament
The technical term for what we all refer to simply as a “will,” this document is perhaps the most common estate planning document. A will is a written statement that details how your property, both real estate and personal property, is to be distributed after your death. In Missouri, it must be signed in front of two witnesses and a notary. After you pass away, your will should be filed with the Probate Court in your county of residence and the Probate Court will oversee the distribution of your property according to the will. If you do not have a will when you die, your property passes to others by what is called intestate succession - which is basically Missouri statute deciding who gets your property.
While there are a number of different forms of trusts, the most common is a revocable living trust, which is established during the Grantor’s lifetime, and the Grantor (i.e., you) retains the right to amend or revoke the trust. Much like a will, a trust directs how your assets will be distributed after your death. However, some advantages of a trust over a will include avoidance of the time and expense of Probate Court proceedings and additional privacy, as the trust will likely not have to be filed with the court and become a public record.
Durable Power of Attorney
Unlike wills and trusts, a durable power of attorney (DPOA) is a document that addresses what happens while you are still alive. There are two common types of DPOAs - financial and healthcare. As you might have guessed, a financial power of attorney names one or more attorneys-in-fact, whom are individuals that you authorize to make financial decisions on your behalf. If you have a financial DPOA, consider filing it with LAGERS to allow your attorney in fact to access your account information and make any needed changes to your LAGERS account. Similarly, a healthcare DPOA names one or more attorneys-in-fact, whom are individuals that you authorize to make healthcare decisions on your behalf. Financial and healthcare DPOAs can be combined into a single document or can be separate documents. The Missouri Bar has a free Durable Power of Attorney for Health Care available on their website.
The Missouri Bar also provides a free Probate Law Resource Guide that discusses the documents above and additional estate planning information in much greater detail than we can cover in a short blog.