There are five extremely important legal documents that every Tennessee family should have in order to protect their family and their assets while they are alive, and provide a smooth transition for their family after their death. Without these five important legal documents your family could find themselves going through the court system while you are alive and going through the court system after you die in order to gain access to the assets that you leave behind.
- The Last Will and Testament
This is the most common legal document and is the cornerstone of every family’s estate plan. In basic terms, a Will states where your assets will go and who will be in charge of disbursing your assets after your death. If you do not have a Will, then Tennessee law will determine where your assets will go. In addition, your surviving family members will have to come to an agreement on who will be in charge and then will have to petition the court for that person to be named administrator of the estate. There could also be issues if there is a rift in the family and some family members want one person to serve as administrator and other family members want someone else to serve as administrator. At the very least, everyone should have a Last Will and Testament in order to prevent these issues and make things simple for your family.
- Power of Attorneys and Living Will Declaration
These important disability legal documents are an extremely important aspect of your estate plan and are legal documents that every family should have. Specifically, these documents include your Financial Power, Health Care Power of Attorney, and Living Will Declaration. These documents give a person that you trust the ability to make important financial and healthcare decisions on your behalf if you ever become physically and/or mentally incapable to make these decisions any longer. In addition, the living will declaration states your wishes when it comes to the withdraw and withholding of life support. If you do not have these important legal documents in place and you become medically incapacitated, such as in a persistent vegetative state, your family would need to initiate a court proceeding to have you named incompetent and have a judge authorize them to make these decisions for you on your behalf.
- Revocable Living Trust
An extremely important legal document that every family should have is the Revocable Living Trust. This is a document that has its own legal identity. Meaning, that by establishing this trust, and transferring all of your assets into the name of this trust, your trust will now own all of your property instead of you owning your property personally and in your own name. However, it is important to make this distinction that having a revocable living trust does not provide any asset protection for you and does not avoid estate taxes should your estate be subjected to those taxes at your death. Although, an important aspect of a revocable living trust is that, so long as your trust has been funded with all of your property prior to your death, is probate avoidance. As I covered in previous blog articles, if you die and assets are owned in your own name, your family will have to go through a difficult court process to gain access to your assets. This process, depending upon the specific issues with your estate, can last anywhere from six months to two years in length. However, if you create a revocable living trust, and properly fund the trust with your assets, your surviving family members will not be required to go through probate and will continue to maintain access to all of your assets at your death, and then will be able distribute your assets to the selected family members.
Trusts can serve many purposes. For instance, trusts can be customized to protect your assets from future nursing home expenses, trusts can be customized protect your children’s inheritance from divorce and future creditors, and your trust can be customized to even serve as an estate tax and inheritance tax planning tool. However, you should discuss your specific needs and goals with an estate planning attorney so that the estate plan and trust that you put in place will properly serve your needs and goals for your family.