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. Without specific legal planning, New Mexico’s intestacy laws dictate how their estate will be distributed after death. However, this may not align with their desired plan. To ensure your intentions are followed, it is crucial to establish a properly drafted estate plan tailored to your needs with the assistance of an estate planning lawyer.
Your last will and testament is a vital component 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 some key points to understand about wills:
Trusts come in various forms, ranging from simple to complex, and serve different purposes in legal, personal, investment, or tax planning. 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. Often, these three roles are fulfilled by a single person or a married couple. For instance, with a revocable living trust, an individual may establish the trust (the trust-maker) and appoint themselves as the current trustee (trust manager), managing the trust assets for their personal benefit (trust beneficiary).
Establishing a trust can yield several advantages, including the avoidance of probate court. In most cases, assets held in a revocable living trust can be immediately transferred to the trust beneficiaries or heirs upon the trust-maker(s)’s death, bypassing the need for probate. Certain trusts may also provide tax benefits for both the trust-maker and the beneficiary. They can safeguard assets from creditors or designate someone to manage and invest property on behalf of the trust-maker(s) and the named beneficiaries. Moreover, well-drafted trusts remain effective even if the trust-maker dies or becomes incapacitated. Contact our estate planning lawyer to explore the potential benefits of establishing a trust for you and your family.
A power of attorney is a legal document that grants another person (the attorney-in-fact) the authority to act on your behalf for 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. To designate a backup decision-maker in case of incapacity, it is advisable to use a durable power of attorney. It is crucial to update durable powers of attorney regularly, as financial institutions and banks may be hesitant to honor a power of attorney that is over a year old.
Request a consultation with your Truth or Consequence Estate Planning Attorney, Michele Ungvarsky.