INTRODUCTION:

Estate Planning is an important process for all the US residents, to ensure their assets are managed and distributed according to their choice and to provide support to their loved ones during times of incapacity or after death, regardless of their wealth, by securing your family’s future, preserve your legacy and ensures your wishes are upheld during both life and death.

A well-drafted estate plan ensures your estate go to the right people, someone else can make use of that wealth for any healthcare or financial decisions if you can’t and the estate avoids unnecessary court delays or expenses.

In simple, Estate planning is about protecting your family, your finances and your wishes and three vital tools in any estate planning are Wills, Trusts, and Power of Attorneys.

WILL:

In the USA, Will is a legal document, made by a testator which directs his property to beneficiary for the distribution and management of all its assets during his lifetime or after the death of the testator. Under Title 18-C of the Maine Probate Code (Uniform Probate Code) and similar statutes across U.S. states, requirements for a valid will are determined by the state law but there are other certain elements such as testator’s legal capacity, intent, written document and proper execution with the witnesses.

Following are the certain requirements for a valid will:

a.    Legal age and capacity:

The person making the will (Testator) must be an adult i.e. must be at least 18 years old and of sound mind i.e. he must be able to understand the documents, property he owns and to whom they are entrusting the property and making him beneficiaries.

b.    The will must be a written document either typed or printed and, in some states, entirely handwritten known as holographic will.

c.    The will must clearly state the testator’s intention for it to be last will and thus replacing any previous will.

d.    At the end of the will, testator must sign the will to make it valid.

e.    The will must be signed by two witnesses in the testator presence but those witnesses must be disinterested i.e. they are not the beneficiaries in the will to avoid conflict of interest or challenges to the will’s validity.

In re Estate of Walker (Nebraska Supreme Court, 2025)

Facts of the case: A woman died after signing a will and after her death, court found that the will was signed under an undue influence as she was not mentally fit to sign the will thus the court ordered the estate to be handled as if she died without a proper will.

This case matter because:

a.    If a person lacks mental ability to sign the will, the will is considered as disregarded.

b.    If a person close to person making a will has the high chance of manipulating thus making the will invalid.

Thus, before making a will Grantor must be of sound mind and aware of what he is signing and writing in a will.

TRUSTS:

Trust is a legal arrangement where a granter transfers his property to one party known as “Trustee” to holds assets for the benefit of another party known as “Beneficiary”. Trust is used for the estate planning to avoid probate, provide control over the assets distribution and to protect his property.

Each trust falls into six broad categories: Living or Testamentary, funded or unfunded, revocable or irrevocable.

A trust can be used to determine how a person’s money should be managed and distributed while that person is alive or after their death. A trust is one of the ways to provide for an underage beneficiary. Once the beneficiary is deemed capable of managing their assets, they will receive possession of the assets in trust.

Components of Trust:

a.    Grantor: Person who creates the trust and transfers assets into it is known as Grantor.

b.    Trustee: The person or entity legally authorized to handle and manage the trust assets according to the grantor instructions is known as Trustee and the trustee has a fiduciary relationship with the beneficiary.

c.    Beneficiary: the person who receives the benefits of the trust’s assets is known as beneficiary but in some cases the grantor can also be the initial trustee and beneficiary.

Categories of Trust:

a.    Living or Testamentary:

A living trust is a written document where individual’s assets are provided as a trust for his own use and benefits during his lifetime. A trustee is made when the trust is established and he gets the charge of handling the affairs of the trust property and after the death of the trustor’s, the trustee transfers the trust property to the beneficiary.

Whereas, the testamentary trust is a type of trust which specifies how an individual’s assets are designated after the trustor’s death and is not established until the trustor dies.

b.    Revocable or Irrevocable:

A revocable trust is a trust that can be changed or terminated by the trustor during that person’s lifetime whereas, Irrevocable trust cannot be changed or terminated by the testator after it has been established.

Thus, Living trust can be revocable or irrevocable but Testamentary trust are generally irrevocable once established but can be revoked during if the trustor is still alive.

c.    Funded or Unfunded:

With a funded trust, a trustor places assets into the trust during their lifetime. Whereas, unfunded trust is a trust arrangement but with no funding and can become funded only upon the trustor’s death or remains unfunded.

Purpose of the trust:

a.    Avoid probate: Assets held in a trust need not to go for any court supervised probate process hence speeding up and simplifying the distribution of assets to the beneficiaries.

b.    Control and Flexibility: Trust allows for detailed instructions to the trustee on how and when trust payment should be made or giving the trustee discretion.

c.    Asset Protection: Trust can also protect asset from creditors and in some cases from lawsuits.

d.    Minimize conflict: The instructions in a trust cannot be contested in court as easily as a will can be. 

[Spurlock v Wyoming Trust Company (Wyoming Supreme Court, 2024)]

Facts of the case: David Spurlock who was the beneficiary of the trust sued corporate trustee of his father’s revocable trust as the trustee was not doing his work properly. Whereas, the trustee claimed that by filing this lawsuit David has violated the clause of “no-contest” which means he will lose his inheritance.

Judgment: The court said that David is not trying to cancel the trust but only asking to the court to make the trustee responsible. Therefore, Supreme court disagreed with the trustee and no-contest clause will not apply.

Therefore, when a no-contest clause in a trust is added it should specify what kind of actions will trigger the clause and courts never punish beneficiary for simply enforcing their rights or asking for an accounting.

POWER OF ATTORNEY:

In USA law, a Power of Attorney (POA) is a legal document where an agent of attorney is appointed to manage any legal or financial affairs in case of incapacitation or when you are no longer able to make your decisions. The person whose assets is authorized to someone else is known as “principal” and to whom such assets are authorized to manage is known as “agent” or “attorney”.

Types of power of attorney:

There are generally three types of power of attorney: General, Specific and Durable.

a.    General Power of Attorney: In general power of attorney, the agent has been vested with broad powers to handle any financial, legal or medical affairs of the principal including real estate management, banking transactions, taxes, investments and many more.

b.    Special power of Attorney: in Special Power of Attorney the power of agent has been limited to any specific transactions or activities such as dealing with the property, representing the principal in any legal matter.

c.    Durable Power of Attorney: In Durable Power of Attorney the power of agent has been specified in a document and the agent can act on behalf of the principal even if he has become incapacitated due to any illness or disability.

Establishing a Power of Attorney:

To establish a Power of Attorney an agent is appointed by the principal or the court to act on the behalf of the principal in managing the affairs of the principal and for that a legal document is created that determines agent’s power and responsibilities.

The document can grant broad or limited authority for decision making regarding finance, medical or legal affairs and must clearly identify the principal and agent and must include their signatures and as well as the signature of the witnesses.

The agent should be above 18 years of age and should be of legal sound i.e. able to understand and manage the affairs of the principal.

Once the Power of Attorney has been established, make sure to communicate with the agent about your wishes, expectations and preferences as the POA can prevent future abuses and legal challenges.

Once the Principal becomes incapacitated, the POA automatically terminates until and unless it is Durable POA.

IMPORTANCE OF POA IN ESTATE PLANNING:

a.    It enables to manage the principal financial and legal affairs if they are unable to manage them.

b.    It reduces the complexity of estate planning and avoids the court intervention when you become incapacitated and can even act in case of an emergency.

c.    Poa avoids the need for a court appointed conservator, which is a more expensive and time-consuming process.

CONCLUSION:

Estate planning isn’t just about documents — it’s about peace of mind. Whether you’re creating a simple will, setting up a trust, or assigning a Power of Attorney, you’re taking control of your future and making life easier for the people you care about most.

By planning ahead, you decide who inherits your assets, who can make important decisions if you can’t, and how to avoid unnecessary court costs or family conflicts. A thoughtful estate plan ensures your wishes are honored — both in life and after.

Even if you think you “don’t own much,” a well-drafted estate plan can protect your home, savings, and loved ones from confusion or disputes. Start today — talk to an estate planning attorney or explore trusted resources like the American Bar Association and the Consumer Financial Protection Bureau to begin securing your family’s future.

Your legacy deserves to be protected — and estate planning is the smartest way to make sure it is.

Your future deserves clarity. Let YLA help you create an estate plan that secures your loved ones and simplifies tomorrow’s challenges — start your free consultation today!

FREQUENTLY ASKED QUESTIONS (FAQS):

1.    WHAT IS ESTATE PLANNING AND WHY IT IS IMPORTANT:

Estate planning is the process of deciding how your money, property, and personal matters will be managed if you become incapacitated or pass away. It ensures your assets go to the right people and avoids court delays or family disputes.

2.    WHAT’S THE DIFFERNECE BETWEEN A WILL AND A TRUST:

A will takes effect after you die and goes through probate court.

A trust can take effect during your lifetime, allows for smoother asset transfer, and helps avoid probate altogether.

3.    WHAT IS POWER OF ATTORNEY:

A Power of Attorney is a legal document that lets you appoint someone to make financial, legal, or medical decisions for you if you’re unable to do so yourself.

4.    WHAT IS THE DIFFERNCE BETWEEN A GENERAL AND DURABLE POWER OF ATTORNEY:

A general POA ends if you become incapacitated.

A durable POA continues even if you’re unable to make decisions, making it more useful for long-term planning.

5.   HOW OFTEN SHOULD I UPDATE MY WILL OR TRUST:

Review your estate plan every 3–5 years or after major life changes like marriage, divorce, birth of a child, or buying new property.

6.    HOW CAN I PREVENT DISPUTES OVER MY ESTATE:

Make sure your documents are properly witnessed, updated, and clearly written. A trust or durable POA can reduce the chance of court fights later.

ABOUT THE AUTHOR:

Shreya Verma is a corporate lawyer and legal content strategist with expertise in corporate law, contract drafting, and regulatory compliance. She has extensive experience drafting commercial agreements and advising startups. Through YLA, she simplifies complex legal concepts to help businesses make informed, compliant, and growth-oriented decisions.

DISCLAIMER:

The information provided in this article is for general educational purposes and does not constitute a legal advice. Readers are encouraged to seek professional counsel before acting on any information herein. YLA and the author disclaim any liability arising from reliance on this content.