Every working individual, in their active life span, gathers assets (cash, land, jewelry, and financial investments) that provide for their needs in their retired life or in case of a medical emergency. As long as one is working, the cash flow keeps coming. But once that stops, one has to depend on savings and investments to maintain their lifestyle and other related amenities.
These assets make up the bulk of the estate of an individual. But what happens to the financial resources if the owner passes away or cannot manage them due to a medical limitation?
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Estate Law
Estate law is the branch of law concerned with the estate and assets of a person, including both physical and personal property. Estate law includes planning and managing financial resources during their lifetime and after it. In addition, this category of law protects the rights of testators and inheritors.
Estate law broadly covers:
- Estate Planning is a guide of the finances and physical assets owned by a person to be handled appropriately when the owner dies or is left incapacitated. The individual does the planning in their lifetime and selects the entire process in consultation with an estate planning attorney. This covers Wills & Trusts, organ donation, funeral arrangements, legal guardianships, and medical emergencies and treatment.
- Estate Administration distributes and manages a person's financial assets after death or indisposition. The appointed Executor of the will oversees that the deed is enacted out in full legal accordance.
- Debts may have been left unsettled and need to be addressed after the individual passes away or is physically impaired.
Estate law is also dictated by jurisdiction limits and may change from state to state. That may complicate issues when the deceased lived in one state and owned a property in another. The legal consultation of an estate planning attorney is highly valued when working on estate planning to avoid those tricky problems.
Estate law is comprised of the following types of laws:
- Wills, and
- Trusts
Wills
Will can be defined as a lawful contract that states a person's wishes regarding how their assets are to be distributed after their death. Who gets what and how much is all determined in the will. This is done to provide legal clarity to the heirs after the person has passed away and to settle any disputes that may arise.
The will is submitted to the court to be proved or probated to verify its authenticity. Once that is done, the court authorizes the Executor to distribute the assets to the inheritors as directed in the will.
Living Will
A Living Will is a legal document that provides explicit instructions and directives concerning the person's medical care if they foresee that they might not be able to make certain decisions themselves in the future. This is an excellent way to ensure adequate medical facilities and care in case of terminal illness, coma, last stage of mental diseases like dementia, and near the end of life.
If there is no will, the state of residence decides how the assets will be distributed. This may not be the way the person might have intended to give things to their heirs. That's why it's recommended that one plans and drafts a will with the help of the right estate planning attorney.
Trusts
A Trust is a fiduciary relationship between a Trustor and a Trustee. The former gives the latter the legal right to safeguard and manage their property and assets for the welfare of a third party, the Beneficiary. The beneficiaries are generally the heirs who might be minors and unable to control the financial end of the estate on their own. Trusts are also created for tax benefits and offer a great deal of privacy to the trustor for their financial resources. A trust comes into effect as soon as it's signed and is acted upon from then on.
Why Monastra & Grater, LLC
Estate law can be a highly complex beast. It is best recommended to hire a proficient and well-versed estate planning attorney like Monastra & Grater, LLC in Pottstown, PA, who would offer the best legal advice and service.
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