ALABAMA A&M and AUBURN UNIVERSITIES

This is the eighth article in a series. Last week's article focused on documents available to help plan how your personal and financial affairs are to be handled. This article continues to examine other important legal documents.
 
 

LEGAL DOCUMENTS CAN HELP MAKE YOUR WISHES KNOWN

Power of Attorney is used when you can still make your own decisions, but you want someone else to act on your behalf. It gives another individual legal authority to manage some or all of your personal affairs. A power of attorney is created in a signed document that states who is the principal agent for an individual. It also describes what powers are being given to another individual on your behalf. A power of attorney does not have to be an attorney, but can be any trusted individual who can act on your behalf or the behalf of a loved one. He or she does not have to reside in the same state.

Be specific about what decision-making power you grant. Power of attorney can allow someone to make deposits into or withdrawals from your bank account or represent you upon the selling of your home if you move out of state. So, you need to be careful to limit the power of attorney action. Power of attorney may end in several ways: a) when you remove power of attorney (this can be done at any time): b) when the individual has completed the designated task; c) if you become unable to make decisions, and d) upon your death.

The main purpose of a WILL is to carry out your wishes in disbursing your property (assets) and to allow you to identify guardianship for a minor child, or incompetent child or adult. Without a will, state laws will guide the distribution of assets among your relatives, including the decision of who will be designated as the guardian for individuals who need such oversight.

A TRUST is a legal document in which legal title of property is held (e.g. home, investments, etc.). A person or institution (trustee) manages the property for the beneficiaries. This relieves the burden of managing finances from an individual who is inexperienced in handling finances. It allows the individual to decide how and when money will be disbursed from one generation to the next. A trust also allows the estate to avoid the risk of a will being contested and time delays, as well as providing privacy of your financial affairs. A personal trust is also advantageous in the event you become incapacitated. In addition, it avoids the process of going through probate court. A trust will not suit everyone's needs, and you should consult an attorney before deciding to set up a trust. You must weigh the cost of setting up a trust verses the benefits a trust can provide. In most states, the probate process is usually simple and relatively inexpensive for small estates.

Upon your death, your loved ones will need information to collect death benefits and settle your estate. A LETTER OF LAST INSTRUCTIONS should include your full name, birth date and place. It should contain the location of important records, such a s marriage certificates, Social Security papers, life and other insurance policies. It also should contain the location of any other legal documents, including wills, deeds to property, automobile titles, and income tax records for the last seven years. In addition your letter of last instructions may include specific directions for funeral arrangements. Next week's article will focus on developing the letter of last instructions.

SOURCE: Jo Turner, Extension Program Specialist, Alabama Cooperative Extension System, (334) 844-3243