Frequently Asked Questions – FAQs
What is a durable power of attorney?
A power of attorney is a document you (the Principal) sign while you are competent that authorizes another person (ie. child, spouse, friend, etc.) to act on your behalf. A Durable Power of Attorney allows that person, known as an Agent, to act even if you later become incapacitated. A durable power can take effect when you sign it or after some triggering event, such as when two physicians confirms that you are not capable of handling your affairs. OPTIONS INCLUDE: Joint or individual agents; successor agents; broad or limited powers; and recording the power of attorney.
What can my power of attorney do?
Your power of attorney, or agent, may be able to sign legal documents in your place, buy and sell real estate for you, pay your bills, and take other financial action on your behalf depending on what is specified in the document. The Principal should consider placing a copy with trusted individual or financial institution to avoid being lost (see guardianship process).
What if I become incapacitated without having executed powers of attorney?
If you are not longer able to manager your property or care for yourself and you have not signed a power of attorney or lost your documentation, any interested party (for example, a spouse, child, other family member, agency, or health care provider) may petition the court to appoint a guardian to act on your behalf. The guardian will be responsible for managing your financial assets and also may be responsible for decisions related to your care. A single individual may serve as both guardian of the estate and person, or the court may appoint separate individuals.
How is a guardian appointed?
Any relative, state official, or other person may ask the court to appoint a guardian. The person who is alleged to be incapacitated will be informed of the petition for appointment of a guardian and of the scheduled hearing. The alleged incapacitated person has the right to have an attorney throughout this process. In certain emergency situation, a guardianship can be issued the same day. See attorney for more details.
What is probate?
Probate is the legal process that will take place after someone passes away with an estate and a Last Will. The process usually lasts seven (7) to fourteen (14) months and costs on average $5,000 to $15,000. A Personal Representative will be appointed and responsible for (1) identifying and inventorying the deceased person’s property; (2) having the property appraised; (3) paying debts and taxes; and (4) distributing the remaining property as the will or intestate law (no will) requires.
Who handles probate?
Usually, the personal representative named in the will is responsible for handling probate. If there is no will, or if the will does not name a personal representative, the probate court names an administrator (male) or administratrix (female) to handle the probate process. Most often, the job goes to the closest capable relative or the person who inherits the bulk to the deceased person’s assets.
Does all property have to go through probated when a person dies?
Not all property has to go through probate when a person passes away. Most states allow a certain amount of property to pass free of probate, or through a simplified probate procedure. In addition, the property that passes outside of the will, for example, a joint tenancy or a living trust, is not subject to probate.
What is estate planning?
Estate planning helps ensure that your assets will pass to those people you designate in a manner that will give them the maximum benefits. It helps reduce or eliminate the tax burden on your estate and it also allows your assts to pass to your chosen beneficiaries without the inconvenience, cost and delay of probate.
What does an estate plan include?
An estate plan will include a will or trust, a written agreement concerning the status of your assets, a directive to your physician or a durable power of attorney and final instructions.
How often should I review my estate plan?
An estate plan should not be considered permanent. Conditions, as well as your desires, may change. Barring an important life change that warrants immediate review, an estate plan should be reviewed at least every two or three years. Life changes that might warrant review include birth, death, marriage, divorce, or disability of you or a beneficiary, a substantial change in your net worth or that of your beneficiary, purchase or sale of a business or moving your residence to a different estate.
What are trusts?
A trust is a relationship in which a person called a trustor or a grantor or settlor transfer an asset to another person, called a trustee. The trustee then manages and controls this asset for the benefit of a third person, called a beneficiary. Benefits include (1) avoiding probate; (2) control and management of assets during life and after death; (3) death tax avoidance; and (4) privacy of family assets and finances.
What is a living will?
If you suffer an incurable injury, illness, or terminal disease where medical life-sustaining measures would only prolong your passing and keep you alive at great expense to your family, a living will states that you would not want those measures taken.
Why do I need a will?
If you pass away without a will, then your property may not pass on as you intended. The will essentially provides the court with a set of instructions for probate. If you do not have a will, your property will pass on according to the state laws, which may not always reflect the way that you intended for your property to pass.
Why do I need an attorney to write a will?
The laws for estate planning and probate are complex and vary from state to state. There are specific rules in Arkansas that govern how a will should be drafted and how is should be executed. If you prepare a will yourself or by using a “form will” that you found online, you could possibly cost your family thousands of dollars, stress, and headache later if that will was not drafted and executed properly.