Living trust, estate plan, will, durable powers of attorney….what is the difference?
The law uses certain terms interchangeably. Unfortunately, these terms are confusing to the layperson. An estate plan is the correct term and refers to all of the following documents: trust, will, durable powers of attorney for finance and health care, and HIPAA. These five documents constitute a proper estate plan. Along with these documents come schedules, which are used to indicate where assets are located, and how you wish to disseminate assets. Of all of these documents the most important one is the trust. Since the trust is the most important of these documents, many attorneys will refer to an estate plan as a trust. When referred to in this fashion, the trust will include all of the documents listed above. So, you will get a will, and all of the durable powers of attorney, plus the schedules. So, to recap, an estate plan is interchangeable with the terms trust, living trust, revocable and amendable trust. It all refers to the same thing. A good attorney should discuss all of the documents and make sure that you understand the purposes of each one. Further, that attorney should also discuss with you the options you have when creating an estate plan. You do have the option of creating a single trust, a married tax, and a married tax planning trust. These options have different benefits for you and you want to make sure that you thoroughly understand each one. For more information about estate planning, or any of our legal services please call us for a free legal consultation over the phone!