Estate Planning 101

Q1: What is the difference between a general durable power of attorney and a medical durable power of attorney, and why do I need both?


A: A general durable power of attorney is one in which you appoint a family member, friend or other person you trust (your “agent”) to step into your shoes and manage your financial affairs and property if you are incapacitated. The agent has a duty to manage your assets for your benefit. If you have a severe or long-term incapacity and have not signed a general durable power of attorney, a court proceeding may be necessary to have a conservator appointed to manage your assets for you, and this can be expensive and cumbersome. 


A: A medical durable power of attorney is one in which you name a family member, friend or other person as agent to make medical decisions for you in the event you are unable to make them yourself. It is important to name an agent who understands your wishes with respect to medical treatment and who will carry them out. If you have a severe or long-term incapacity and have not signed a medical durable power of attorney, a court proceeding may be necessary to have a guardian appointed to make medical decisions for you; this can also be expensive and cumbersome.  


Q2: My spouse and I have minor children, and we are just beginning to invest and build savings. Do we really need an estate plan?


A: Yes. A good, comprehensive estate plan involves a consultation with an estate planning attorney who will walk you through all of the topics addressed below. It need not be elaborate or expensive. You should have basic powers of attorney, as described above, and your estate plan should, at a minimum, cover the following basic issues: 


● Guardian for children. Wills are often used to nominate a guardian to care for minor children in case both parents pass away unexpectedly. The guardian should be someone you know well, and whom you would trust to raise and care for your children as you would. 


● Trustee for children.  


Minor children cannot legally own assets. Wills and trusts are often used to create a trust to manage assets and handle investments for the benefit of children while they are minors, young adults or even beyond. You control the purpose and duration of the trust by the language you put in your Will. A very common estate planning mistake that people make is to assume that a Will controls where all of your assets go when you die. This may or may not be true, depending on how your assets are titled at your death. Property you own in joint tenancy with right of survivorship generally goes to the surviving joint tenant (regardless of what your Will says). For retirement accounts, bank accounts and life insurance policies that have signed beneficiary designations on file, the funds generally go to the person(s) designated on the beneficiary designation. Because minor children cannot legally inherit assets, it is important that you work with an estate planning attorney to coordinate the titling of your assets and your beneficiary designations with the language in your Will. That way, if you and your spouse pass away unexpectedly, your assets will pass into the trust you create for your minor children and will avoid having to go to court to establish a conservatorship to manage assets for the children. 


Choice of trustee is important. The trustee should be someone you trust to manage money and assets safely and prudently. Many people name the same person as guardian and trustee without giving it much thought. However, serving as a trustee is different than serving as a guardian. Trusteeship can be a time-consuming job – and it carries with it a number of legal duties and responsibilities. Consider whether the person or persons you name as trustee have sufficient knowledge, experience and time available to manage investments, or whether they might benefit from having a corporate fiduciary’s help, either as investment advisor or co-trustee. Alpine Bank Wealth Management has officers with extensive experience managing investments and administering trusts, and offers a full array of wealth management services for families.


● Successor fiduciaries and beneficiaries. 


● Successor Guardian. Estate planners often recommend nominating a first and second choice of guardian in your Will. 


● Successor Trustee. Estate planners often recommend nominating a first and second choice of trustee to manage the assets and investments in the event that your first choice of trustee is unable to serve.  


● Successor beneficiaries. If you, your spouse, and all of your children were killed in a common disaster, who would you want to receive your assets? This is a question that many people have not considered before, but one that should be covered as part of your estate plan. 


Alpine Bank Wealth Management stands ready to help you with your trust and wealth management needs. 



Darla Daniel, J.D. – SVP and Director of Wealth Management
Alpine Bank Wealth Management


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