SimplyTrust Knowledge Base

A: A power of attorney is a legal document that allows someone (the agent or attorney-in-fact) to act on behalf of another person (the principal). This authority can cover a range of financial, legal, and health-related matters, depending on how you structure it.

A: An education trust is a legal arrangement that sets aside funds specifically for educational expenses. Unlike other savings accounts, these funds are managed by a trustee and are distributed according to the trust’s terms. This ensures that the money goes solely for educational purposes, preventing misuse or early depletion.

A: Non-financial assets include anything of value that isn’t tied to a bank or investment account. These can range from tangible property to intellectual property to sentimental items like family heirlooms and photo albums.

A: A health care proxy is a legal document that allows you to designate someone—often called an agent or proxy—to make medical decisions for you if you become unable to do so. This could happen due to illness, injury, or unconsciousness.

A: Guardianship is the legal authority granted to an individual (the guardian) to make personal, financial, and medical decisions for another person (the ward) who is unable to do so themselves. This can apply to minors, adults with disabilities, or even elderly individuals who can no longer manage their own affairs.

A: A special needs trust protects beneficiaries without jeopardizing their eligibility for essential government benefits. (It can be an important element of guardianship in estate management.)It provides financial support to individuals with disabilities while preserving their access to public benefits like Supplemental Security Income (SSI) and Medicaid. These programs often have strict income and asset limits, making direct inheritances or gifts problematic. A special needs trust solves this by keeping the assets in a legally protected trust, managed by a trustee who oversees distributions.

A: A quick overview of wills: a will—officially known as a last will and testament—is a legal document that specifies how to distribute your assets after you pass away. It also lets you name guardians for minor children and specify other important wishes, such as funeral arrangements. Without a will, state laws dictate how to divide your estate, which may not match your intentions.

A: Advance health care directives are legal documents that specify your medical treatment preferences and names someone to make healthcare decisions for you if necessary. It ensures that doctors and loved ones follow your wishes, even if you can’t express them due to illness or injury.

A: People avoid estate planning for loads of reasons (bad ones). Some people feel like they're too young or don't own enough or they can just do it later. Others find it to be an unpleasant experience (although it doesn't have to be). Some think it's too complicated, time-consuming and expensive (although, again, it doesn't have to be). And still others figure their family will handle it and that it'll all work out.

A: Life is always changing, and a trust should change with it. Regular updates ensure an estate plan reflects your wishes, protects your loved ones, and makes things as smooth as possible for everyone involved. It's important to update trusts. And keep updating them.Major events like getting married (or divorced) or having a baby happen. Finances can go up (e.g., new job) or down (e.g., lost job). Assets change (e.g., buying a house or selling a house). Families and relationships change (e.g., marriage, divorce, birth, death). And sometimes it's just sensible to make legal or strategic decisions.

A: A pour-over will is a special type of will that works hand in hand with a living trust. Its main function is to ensure that any assets not already in your trust automatically transfer (or “pour over”) into the trust.Essentially, it acts as a safety net. If certain assets aren’t already in your trust, the pour-over will direct them there. This way, your estate plan remains intact, and your assets are ultimately distributed according to the terms of your trust.

A: Getting a trust isn’t just for the ultra-rich or paranoid—it’s a smart, strategic move that protects your assets, your privacy, and your loved ones. Whether you’re looking to avoid probate, minimize taxes, or make sure your 20-year-old doesn’t spend their inheritance on an ill-advised TikTok stunt, getting a trust is the way to go.

A: A trustee is a person or entity legally responsible for managing the assets held in a trust. Their duty is to act in the best interests of the beneficiaries, ensuring the trust operates according to the grantor's intentions. Trustees can be individuals, such as family members or close friends, or institutions like banks and trust companies. Core responsibilities:

A: Protecting beneficiaries from themselves isn't about withholding wealth. It's about ensuring that their inheritance provides lasting financial security. By tailoring an estate plan to your beneficiary's specific needs, several vehicles can accomplish this:

A: A 529 plan is a tax-advantaged savings plan designed specifically for education expenses. These plans are typically offered by states and have certain restrictions but come with significant tax benefits. (Here's more about 529 plans from the horse's mouth: the IRS.)

A: The most notable difference between individual trusts and joint trusts lies in ownership. Individual trusts are highly customizable and independent because the trustor doesn't have to consult with anyone else on decisions. However, this can lead to a more fragmented estate plan for couples who manage their assets separately.