Every estate plan should include at least three essential documents: a Durable General Power of Attorney, a Healthcare Power of Attorney, and a Last Will and Testament. Of these three essential documents, two are used only during life (the Powers of Attorney) to give someone else power to handle affairs if you’re unable; and one is used only after death (the Last Will and Testament, usually simply called a “Will”) to direct final distribution of assets.
It’s important to know that, unfortunately, terminology isn’t entirely consistent in the world of estate planning. There are some documents that go by a couple of different names, and others that are quite distinct but sound similar.
For example, a Will, also called a Last Will and Testament, is entirely distinct from a Living Will. A Will is a declaration of an individual’s wishes for handling his or her property after death, and a nomination of the person who should handle it. A Living Will, on the other hand, refers to a document that outlines end of life decision-making, such as use of life-prolonging machines.
We’ll call the person who writes the Will the testator for purposes of this article. A Will usually includes certain sections:
- It recites the testator’s marital status and family relationships
- It outlines the testator’s desire for property division and distribution
- It nominates the people who should serve in fiduciary roles (Personal Representative; possibly a Trustee; possibly a Guardian for minor children)
- It outlines the rights and duties of the Personal Representative in handling the testator’s estate
Having a Will does not mean. that the testator can avoid Probate. A Will is instruction to the Probate Court about the testator’s wishes. If the property is held solely in the testator’s name, without a payable-on-death designation or a beneficiary designation, it still must pass through probate. Luckily, in Maine this is not a particularly cumbersome process.
The person named as Personal Representative does not immediately have authority to handle affairs. The Probate Court must review the submitted Will and Death Certificate to confirm that everything is valid, then they approve the Personal Representative’s appointment. In Maine, he/she will be issued Letters of Authority, which is a short document from the Court that confirms who has the power to manage the affairs of the Estate.
Many assets pass outside of the probate process, so a Will does not govern everything a person owns. Assets with joint ownership pass automatically to the survivor and are not considered probate assets. Likewise, assets with beneficiary designations (like retirement accounts or insurance products) transfer ownership automatically at death. Payable-on-Death or Transfer-on-Death designations behave the same way.
The Will may suggest that all assets will be distributed a certain way, but it does not govern the types of accounts listed in the prior paragraph. The testator must update those beneficiary designations to match his/her current estate plan.
Even though certain assets are considered probate or non-probate assets, all must be considered for tax purposes.
Lifetime debts of the testator, including costs of care, must be paid before beneficiaries receive property. The Personal Representative has the authority and obligation to handle all assets of the testator. He/she must notify debtors of the death, handle personal property, pay final expenses, file tax returns, and ultimately distribute assets.
Rev 7/25
The information presented on this website is general in nature and not intended to be legal advice. No attorney-client relationship will exist with JKS, LLC unless agreed to in writing. Please contact us to discuss your particular situation.
