Before you meet with your estate planning attorney, it helps to be familiar with some of the terminology you’ll be encountering. Here’s a brief introduction.
Will A legal document that takes effect after your death and with which you specify how property titled in your name alone will be distributed and to whom. You can also use your will to name a guardian for your minor children and to establish trusts. The formal name for a will is “Last Will and Testament.”
Revocable Living Trust An estate planning tool with which you name a trustee (usually yourself) to manage your money and property while you’re alive, and then a successor trustee to distribute your property to your beneficiaries upon your death. The Revocable Living Trust is flexible, because you can change or end it at any time. It allows you to avoid probate because your property is removed from your name and titled in the name of your trustee, who manages it on behalf of you and your beneficiaries.
Probate The court process by which the distribution of your property is managed if you die owning property solely in your name. Probate can be time consuming and does involve certain expenses.
Power of Attorney A legal document that allows you to appoint another person, called an “Attorney-in-Fact,” to manage your financial affairs and sign legal documents on your behalf if you are absent or incapacitated.
Healthcare Directive An estate planning tool with which you specify what treatments and life sustaining measures you do and don’t want your doctors to administer in case you’re seriously injured or gravely ill and can’t make medical decisions for yourself.