My Civil Advocate

We often hear a lot of confusion regarding the terms "will" and "trust", with some folks even thinking that they are one and the same, which is definitely not the case. Though both are key elements of estate planning, they serve distinct roles. A will only goes into effect after the will's creator  - also known as the testator - has passed away. The person then responsible for carrying out the desires of the testator and distributing assets to the beneficiaries is referred to as an executor. Executors are in charge of wills, not trusts. So, whats a trust? A trust is a legal arrangement under which one person or institution, called a trustee, holds legal title to property that will eventually be distributed to beneficiaries. Unlike a will, a trust can be "active" the moment it is created. It may be used to distribute property to beneficiaries prior to the death of the trust's creator (settlor), upon the death of the settlor, or delayed well afte...

Staggering medical bills, rising prescription medication costs, and declining pension amounts, among other factors can lead to a mountain of debt for seniors. Instead drawing down available retirement assets, declaring bankruptcy might be a better option for some. In basic terms, Chapter 7 bankruptcy enables you to discharge many of your debts. However, nonexempt assets may need to be sold to pay creditors. Chapter 13 bankruptcy allows you to maintain all of your assets as you work out a new payment plan to pay creditors over a 3-5 year period. IF you have a large amount of equity in your home, you'll need to know how much is protected during bankruptcy proceedings. Amounts vary from state to state. Some states protect the full value of a home; other protect only a small amount, which could lead to the Chapter 7 bankruptcy trustee selling the home in order to pay creditors. Medical-bill debt can be wiped out under Chapter 7 proceedings. Keep in mind that bankruptcy only elimi...

Probate is a legal process by which the court establishes the validity of a will; determines the value of the estate; resolves issues with payment of creditors, taxes, and other debts; and distributes assets to heirs. It also has some serious drawbacks. For one thing, probate is a public process; financial privacy goes out the window. Probate can also drag out for months, sometimes over a year, due to court hearings and other court-related matters. Last but not least, probate can be expensive. Attorney and executor fees can drain up to 5 percent of an estate's value in some circumstances. Throw in appraiser's fees and court costs, among other expenses, and heirs take a significant hit in the final estate distribution. There are a number of tools available to minimize (or eliminate) the toll probate takes on an estate. Properly designate beneficiaries or title assets so they transfer directly to beneficiaries (apart from a will) - e.g., life insurance policies, IRAs, annuiti...

One of the most common misconceptions people have about wills is that they're basically a "set it and forget it" type of deal. Meaning that once you've got the document in place, you really don't have to make changes to it. The reality is that wills should be updated throughout your life to account for important changes that happen to you and to make sure your assets are distributed in the manner in which you had intended. Some life changes or circumstances that could warrant a change to your will can include: If you find yourself no longer getting along with the executor or a beneficiary of your will. If there is the death of a beneficiary or the birth of a new family member.  If the size of your estate has significantly increased or decreased. If you decided that you want to change the amounts you are leaving to beneficiaries. If you move to another state.  If changes aren't made to a will it won't necessarily invalidate the document, but at...