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Your last will and testament is just one part of a comprehensive estate plan. A will is a legal document that transfers your assets, which include your personal and business property and capital, to the people and organizations you wish to receive them. A will only becomes operational at death. You can change your will as many times as you desire during your lifetime and when you pass away, it is your last will that controls. However, wills do not avoid probate. Wills have no legal authority until the willmaker dies and the original will is delivered to the Probate Court. Drafting your will properly with Infinite Estate Planning Attorney Wayne Hood ensures that your assets pass on in the manner you choose. For a will to be valid, it must be executed with particular formalities.
A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries. Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death. Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.
Power of attorney
A power of attorney is a legal document giving another person (the attorney-in-fact) the legal right (powers) to do certain things for you. What those powers are depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker, and may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions). When the intent is to designate a back-up decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.
These directives pertain to treatment preferences and the designation of a surrogate decision-maker in the event that a person should become unable to make medical decisions on their own behalf. Advance directives generally fall into three categories: living will, power of attorney, and health care proxy.
When someone has a company, small business or an organization that accrues revenue, he or she may be able to transfer the ownership of the entity to a family member when he or she reaches retirement or upon his or her death. This act is business succession planning, and it is important for those with a company that is still thriving rather than sell the business. When someone has reached the retirement age and wants to rest and leave the remaining company that is still accruing revenue, he or she needs to consider a business succession plan. This is similar to estate planning, but this type of inheritance is an entire company that has methods and procedures already working for it that continue to sell products or services.
Property ownership is anything that is owned by a person or entity. Property is divided into two types: real property which is any interest in land, real estate, growing plants or the improvements on it, and personal property which is everything else. Common property is ownership by more than one person of the same possession. Community property is a form of joint ownership between husband and wife recognized in several states. Separate property is property owned by one spouse only in a community property state, or a married woman's sole ownership in some states.
Business formation is a necessary early step when starting a business, whether you're registering a simple DBA, incorporating or forming a partnership. The way in which your business is formed will determine the personal liability of the founders, how taxes are paid, and other important details. For example, a sole proprietor typically makes decisions on her or his own, while a partner in a partnership must get approval from all other partners prior to making major decisions for the company.