Estate Organizer with your Living Trust, Will,
Durable Power of Attorney, Medical Directives

A Pour-over will act as a backstop against issues that could frustrate the smooth operation of a living trust. It ensures any assets a grantor neglects to add to a trust, whether by accident or on purpose, will end up in the trust.

Also, while your big-ticket assets, such as a home, should be owned by your trust, you likely have other smaller keepsakes –a china collection, watches etc. – that you want to give to a specific person. You can put these on Schedule A in your Trust, but in case you did not, a pour-over will is the legal document that states where you want these assets to go after your death.

If you have young children, you must, must, must have a will. A will is where you appoint a guardian for minor children, and pets. I realize thinking about this can be upsetting, but let’s talk about something even more upsetting: if you die without a will that establishes your children’s’ guardians, decisions about the care of your kids are going to fall to the court system. That’s what happens when parents die without a legal guardian ready to step in. Sure, a sibling or cousin or dear friend might end up as the guardian, but only after a draining court process, and potentially ongoing court oversight.

Medical Directives (sometimes known as a health care proxy), is a person you appoint who will step in and discuss your care with your doctors if you ever become unable to do so for yourself.

Without Medical Directives in place, you are potentially creating a difficult situation for your family if there are disagreements on care. What a horrible time for them to be arguing. By having Medical Directives, you are telling your family: “This is the person who I have chosen to make the decisions.” That also will help your medical team. Being able to get quick clear guidance from the medical directives, rather than having to navigate family fighting, can speed up your treatment.

A Durable Power of Attorney is important because certain assets, such as your 401(k), IRAs and pensions don’t belong in your trust. And for other types of assets, such as bank accounts and regular brokerage accounts, sometimes the institution gets cranky about accepting trust documents. If you are incapacitated and social security disability paperwork needs to be signed, this is the only legal document that they accept.

In the event you ever need help managing those accounts while you are alive, a durable power of attorney is the official document that gives someone you appoint the authority to step in.

A durable power of attorney document is also going to smooth out having someone help you manage other accounts. Utility companies, credit card issuers, the management company for your lease, won’t share information with anyone not named on your account. With this document your appointed representative will be able to easily step in and help manage your affairs.

Whether it is a sudden illness such as the coronavirus or the onset of dementia later in life, a durable power of attorney is such an important step to protect yourself from financial issues.

One of the differences between a will and a trust is when they kick into action.

A will lays out your wishes for after you die. And has to go through probate, which costs thousands of dollars and many months, sometimes years to settle.

A living revocable trust becomes effective immediately. While you are alive you can be in full charge of your trust. And when you become incapacitated or die, the person you appoint as the successor trustee can easily step in and handle your affairs exactly as you have laid out in the document.

You love your family more than anything, right? Having both a trust and pour-over will is a powerful way you show your love. It will save your family time and money. And the heartache of squabbles if you were to die and not leave clear instructions on who is to get what.

Having a trust, no matter your current financial status, is always a good idea.

It is important to understand that if you only have a will, when you die your family will have to go through a lengthy court process to have the right to follow what you laid out in your will. This is called probate. In addition to being time-consuming and costly (they will need to hire a lawyer) it is also public. When you die with only a will, that document must be filed with the court, and can be accessed by anyone.

The surest way to avoid probate is to have a trust. A living revocable trust does not need court approval. Everything stays private, and your successor trustee can take over its management immediately upon your incapacitation or death.