The answer is yes, it is called a Pour over Will. There are a couple of reasons why you still have a will. The first reason you have a will is that is the document thatnominates the guardians for your minor children. I have seen attorneys nominate guardians in a revocable trust and that is really a bad idea. The reason is that the document that nominates the guardians has to be filed in court which then becomes public record, so if you have all of the details of your estate plan list all of your assets in your trust and you then file it with the court, you just turned your private family information into public record.
In the case of a pour over will, all that you really have is a skeleton will that says three simple things. First, you name the executor of the will. Next, you nominate the guardians for your minor children. Third is the pour over provision which simple says that if you failed to properly put an asset into your trust, then when you die, transfer that asset to the trust. Now the problem with the pour over will is that the asset has to go through the probate system but at least everything will eventually get to the trust and be managed according to the instructions that you stated in the trust.
What Does Power of Attorney Mean and How Does it Apply to an Estate Plan?
What a power of attorney basically means on the financial side is that I give someone the right to sign my name. The power of attorney can be very general, for instance allowing access to my bank accounts, my real estate, my 401(k), my life insurance,etc. Alternatively, the power of attorney can be very specific, that is called a limited power of attorney. For example, you can sign the checks on my bank account but you cannot do anything else.
The reason why you have a power of attorney is because if you become incapacitated, you want somebody to be able to manage your affairs. You can have the power of attorney effective the day you sign it or you can make it what is called a springing power of attorney. The springing power of attorney basically says that I name you today to be my agent but you can only sign for me if and when I become incapacitated and then it springs into action. That sounds like really a great idea, except how do you determine that you are incapacitated? That is where a springing power of attorney gets problematic.
I always tell my clients that powers of attorney are extremely dangerous documents because you are giving someone the right to sign your name. There is more elder abuse happening now because the power of attorney was not properly designed and structured to protect the creator and the grantor of the power of attorney. What I always tell my clients is that doing a power of attorney is not just an afterthought; it is something that you really need to be careful about because down the road, it can really cause you a lot of problems.
How Does One Go About Making Modifications in the Future?
With regards to a trust, as long as you keep it revocable, you can change it anytimethat you want to by executing an amendment to the trust which should be notarized. Generally, the items that get changed in the trust most often are who is going to receive the assets and when they are going to receive them; or who is going to be successor trustee when you die.
For example, initially because your kids were so young you set it up for them to get the money when they attain age 35. But now many years later you realize your kids are quite responsible and can get the money now if you were to die tomorrow. So you can execute an amendment and change those provisions to state that.
The other thing people generally want to change in the trust is who the trustee is, that is the person that is going to manage the money and the assets after you are gone. A lot of times, parents will have their family members or their best friend act as the trustee while the kids are young and then when the kids are old enough, the parents amend the trust and make the kids the trustee so that they donot have to deal with any outside parties in administering the estate. These are the kinds of things that people will normally modify in a revocable living trust.
In a will, generally it is something very similar, either changing who gets the money or who is the executor of the will. If you have a revocable trust, then the number one thing that the people usually change is who are the guardians because over a period of 10 to 15 years, when your kids are young, you think about having certain people like your parents to be the guardians but 10 or 15 years later, maybe your parents are a little bit older and you decide you want your brother or your sister or your best friend to be guardian. These are the things that you will change in the will.
In terms of assisting people with this, as an attorney, I assist my clients with making changes to their documentsIn terms of can you change a portion of your documents, then answer is that you can change anything you want, anytime you want, anyway you want because your documents are always revocable.
You can change one item in your will and leave the rest alone. If you do that, that’s called a codicil. A lot of times, people would just want to write a whole new will and just revoke the old will. You can do the same in a trust and that is called a trust amendment. What the amendment says basically is that this is my trust and it says all of the stuff I want and I just want to change this one particular provision that used to say this and it now says this. You sign and notarize the amendment and it is valid and it just modifies whatever provision in the trust that you wanted to change.
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