Financial stability can take years to build, and protecting that stability for future generations requires thoughtful planning. Estate planning is not just about deciding who receives property or wealth after death–it is about ensuring that those assets are preserved, managed, and transferred according to your wishes. Without clear, legally recognized documents, even the most carefully built estate can be vulnerable to disputes, mismanagement, or creditor claims.

Many people begin the estate planning process only after a major life event, but establishing a plan early can provide greater control over personal and financial matters. An attorney with experience in estate planning can help you understand how different tools like wills, trusts, and powers of attorney work together to safeguard assets and minimize the risk of complications in the future.

Are Verbal Agreements Valid in an Estate Plan?

Verbal agreements are often made with the best intentions, especially among family members or close friends. However, when it comes to estate planning, these types of informal promises rarely hold legal weight. Courts generally require that an estate plan be documented in writing and properly executed according to specific legal standards. This can help ensure clarity and prevent misunderstandings or disputes after a person’s passing.

For instance, if someone verbally promises to leave a family heirloom or financial asset to a particular person, that promise is unlikely to be enforceable unless it is clearly documented in a will or trust. Verbal agreements can also lead to conflicting interpretations among heirs, making probate proceedings longer and more contentious.

An attorney can assist in formalizing these intentions by drafting clear, written documents that comply with the applicable laws. By doing so, you can prevent confusion and ensure that assets are distributed according to your actual wishes, not based on differing recollections of an informal conversation.

The Purpose of a Will in an Estate Plan

A will is the cornerstone of most estate plans because it provides explicit instructions for how assets should be distributed after death. Without a will, state laws known as intestacy laws will determine how property is divided, which may not align with your preferences. A properly executed will can designate beneficiaries, name guardians for minor children, and identify who will manage the estate during the probate process.

Beyond distribution, a will serves another critical purpose: reducing uncertainty. When heirs understand what was intended, they will be less likely to contest the estate or challenge one another’s claims. However, wills must be written, signed, and witnessed according to legal requirements to be valid.

An attorney can guide you through the drafting process to ensure that your will reflects your goals and complies with the law. While an online template might appear convenient, professional guidance can help avoid common mistakes that lead to invalid or unclear provisions.

Advantages of Setting Up a Trust for Beneficiaries

While a will provides direction for how assets are distributed, a trust can offer an additional layer of protection, particularly when safeguarding wealth from creditors or ensuring that beneficiaries receive their inheritances under specific conditions.

A trust is a legal arrangement where someone known as a trustee handles certain assets on behalf of a chosen beneficiary. Unlike a will, which takes effect after death, a trust can become active during a person’s lifetime. This allows for more flexibility and control over how and when assets are used or transferred.

Trusts can serve several protective functions:

• Protection from creditors: Assets held in certain types of trusts may be shielded from the creditors of beneficiaries. This means that if a beneficiary faces financial difficulties, the funds in the trust may remain safe and continue to serve their intended purpose.
• Controlled distribution: A trust can establish terms for when and how beneficiaries will receive assets. For example, distributions can be delayed until a beneficiary reaches a certain age, graduates from school, or achieves other milestones. This can help to prevent premature spending and preserve wealth for the long term.
• Avoidance of probate: Assets placed in a trust typically do not go through probate, which can save time, reduce costs, and maintain privacy for the estate and its beneficiaries.

It is often beneficial to work with an attorney who can explain the options and help select one that aligns with your goals. An attorney can also ensure that the trust is funded properly, as assets must be titled correctly to achieve the desired protections.

Creating a Financial Power of Attorney

Estate planning is not only about what happens after death: it also addresses how financial matters will be handled during your lifetime, especially if you become unable to manage them independently. A financial power of attorney allows you to appoint someone you trust (the agent) to control your finances and make decisions regarding your wealth.

This document can grant broad authority to the agent, such as paying bills and approving major transactions, or it can limit the agent’s powers to specific actions. The flexibility of a financial power of attorney allows it to be tailored to your comfort level and circumstances.

Without a power of attorney, your family may face significant challenges in managing your finances if you become incapacitated. In many cases, they must go through a court process to be appointed as a legal guardian or conservator in a time-consuming, costly process.

An attorney can help you understand the scope of authority granted through a financial power of attorney and ensure that the document meets all legal requirements. They can also explain how this tool fits within your broader estate plan, providing continuity in financial management regardless of changes in health or capacity.

 

Disclaimer: The information provided in this article is intended for general informational purposes only and does not constitute legal advice. Estate planning involves complex legal processes, and individual circumstances may vary. It is highly recommended that you consult with a qualified attorney who specializes in estate planning to ensure that your documents are properly drafted, executed, and compliant with applicable laws.