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Estate planning encompasses various legal strategies, such as wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents. Many new clients are unaware that they already have an estate plan in place, albeit one determined by New Mexico’s laws of intestacy if no other legal planning has been done. However, it’s essential to note that this default plan may not align with their preferences. By working with a skilled estate planning lawyer, you can establish a meticulously crafted estate plan that supersedes the state’s provisions. Take the first step towards securing your future by consulting with an estate planning attorney.
Your last will and testament forms are a crucial part of a comprehensive estate plan. When a person passes away without a will, known as dying “intestate,” state laws determine the distribution of their assets. Here are a few key points to understand about wills:
A will only becomes legally effective after death. It does not enable the management of a person’s affairs during incapacitation caused by illness or injury.
A will does not exempt an estate from going through probate. Instead, it serves as the legal document submitted to the probate court, essentially serving as an “admission ticket” to probate.
A will is an ideal tool for naming guardians for your minor children as a precaution in case they are orphaned. All parents with minor children should document their choice of guardians. Failing to do so may lead to family disputes and result in the appointment of unsuitable guardians for your children.
Trusts come in various forms, ranging from simple to complex, and serve multiple purposes, including legal, personal, investment, or tax planning objectives. At its core, a trust is a legal entity involving at least three parties: the trust-maker, the trustee (trust manager), and the trust beneficiary. In many cases, a single person or a married couple may fulfill all three roles. For example, in a revocable living trust, an individual can establish the trust (trust-maker) and appoint themselves as the current trustee (trust manager) who manages the trust assets for their own benefit (trust beneficiary).
Establishing a trust can offer numerous advantages, such as avoiding probate court. Assets held in a revocable living trust generally pass directly to the trust beneficiaries or heirs upon the trust-maker’s death, without requiring probate. Certain trusts may also provide tax benefits for both the trust-maker and the beneficiary, protect assets from creditors, or enable the appointment of someone else to manage and invest property on behalf of the trust-maker(s) and designated beneficiaries. Well-drafted trusts continue to be effective even if the trust-maker passes away or becomes incapacitated. Contact our estate planning attorneys to determine if establishing a trust would be beneficial for you and your family.
A power of attorney is a legal document granting another person (the attorney-in-fact) the authority to act on your behalf in specific matters. The extent of these powers depends on the terms outlined in the document. Powers of attorney cease upon the maker’s death and may also terminate if the maker (principal) becomes incapacitated and unable to make or communicate decisions. When the intention is to designate a backup decision-maker in the event of incapacity, a durable power of attorney should be utilized. It’s important to update your durable power of attorney yearly.
Request a consultation with your Alamogordo Estate Planning Attorney, Michele Ungvarsky.
