Living trust, will, power of attorney?

[Steve Burke]

I have two rental properties, one in Minnesota and one Alabama. I am currently living in Arkansas and about to close on a house which will be my primary residence.  I want to make arrangements so my sister can take care of the management or sales of these properties and then transfer them to my daughter when she is a legal adult. 

What is the easiest way to protect my assets and avoid a probate legal headache for my sister. Will? Living trust? POA?

Thanks for any advice

[Raquel D.]

Hi! I'm not a lawyer but it sounds like you are smartly planning on going to one for estate planning and tax advice.

As many others have pointed out, a Will does specify how assets will be administered on death, but it usually requires a court proceeding (called a probate) in order for someone to have authority to transfer title to assets to your beneficiaries. The probate is also time consuming and costly.

By creating a living trust, you can avoid a probate generally. You'll have a Will as well, but it will "pour over" assets into your Trust (in case you forget to put something in Trust). I'm sure your estate planning attorney will go over this in great deal. It is very important to make sure all your assets get titled in the name of your Trust.

The power of attorney for finance would ONLY be valid while you're still alive. You can make it effective immediately (so someone could be POA right now) or make it effective only on your incapacity -- that's called a springing power of attorney. Once you die, the power of attorney is invalid.

(Someone also mentioned a power of attorney for health care in here -- also known as an advance health care directive or living will. That's so you can nominate someone to make medical decisions for you if you're incapable of doing so.)

Also for the LLC discussion -- if you put property in an LLC, then as long as the member of the LLC is your trust, when you die the LLC interest (and real property owned by the LLC) will pass to whoever you name as beneficiary(s) under your trust.

Hope that helps!