DURABLE GENERAL POWER OF ATTORNEY - a legal document that authorizes another person to make legal or financial decisions such as paying bills, banking needs or filling out tax forms if you are unable to do so. "Durable" means it remains valid even after the person giving the power has become incapacitated. The person who is given this power is called the "Attorney-In-Fact."
DURABLE POWER OF ATTORNEY FOR HEALTH CARE - legal document that authorizes another person to make medical and personal decisions if you are unable to do so. Provisions are broader than a Living Will which is limited to life and death medical care.
GUARDIANSHIP - the court names someone the Guardian of another person (the Ward), giving the Guardian control over the Ward's legal and/or financial matters. Can be a full guardianship, a limited guardianship, or a conservatorship (for finances only). In a full guardianship, the Ward can no longer sign contracts, write checks, make financial decisions, decide where to live, or make his/her own medical decisions.
IRREVOCABLE TRUST - a trust that can't be modified or terminated without the permission of the beneficiary. The grantor, by transferring assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust. An irrevocable trust is often created for estate and tax considerations. The benefit of this type of trust for estate assets is that it removes all incidents of ownership, effectively removing the trust's assets from the grantor's taxable estate. The grantor is also relieved of the tax liability on the income generated by the assets.
LIVING WILL/ADVANCE DIRECTIVE - allows you to express your wishes, in advance, about medical treatment to be administered when you are terminally ill or permanently unconscious. Unlike a last will, it has nothing to do with property division after your death.
PAYABLE ON DEATH (POD) or TRANSFER ON DEATH (TOD) - beneficiary designation on a banking or investment account that transfers the account, upon your death, to the named beneficiaries outside of the probate process.
PROBATE - legal process by which many of your assets, upon your death, pass to either the beneficiaries you name in your will or to your heirs according to state law if there is no valid will. To begin the process, a petition for probate is filed with the court in the county where the deceased lived. Once a probate estate is opened and the court appoints a Personal Representative/Executor, there is a six month period for creditors to file claims. Distributions are generally not made to beneficiaries during this six month period. Not all assets pass through probate. Assets such as those held in joint ownership with right of survival, life insurance policies, IRAs, and paid on death accounts may not go through probate.
REPRESENTATIVE PAYEE - person designated by Social Security or Veterans' Administration to receive benefit checks on behalf of another person. The payee must be able to provide a full accounting of use of the money on behalf of the person if requested to do so. Designation requests or changes are done at the SSA or VA office.
REVOCABLE LIVING TRUST - a trust that alllows you to transfer ownership of assets to a trust that is administered by someone you appoint (and can be yourself), and provides for successor trustees without court intervention. The trust can be changed or terminated at any time before your death. You can designate who will receive your assets and who will manage & distribute them upon your death or disability, outside the probate process. Does not provide asset protection from Medicaid requirements, and is subject to estate and inheritance taxes.
WILL - legal document that describes how you want your assets distributed after your death, appoints a personal representative to carry out your wishes, and can nominate a guardian for minor children if necessary. Your will should be updated periodically to account for changes in your circumstances or wishes, and changes in the law.