FAQs And Definitions

Real Estate Closings

Wills, Trusts & Estates:

Getting Ready for Your Closing

The closing is the procedure by which the title to the property is transferred from the seller to the purchaser. If the purchaser has obtained a loan, the lender's required documents are executed at this time. In the state of Georgia, the closing must take place under the direction of an attorney who represents the lender, if a loan is involved. If the transaction is cash, then the attorney may represent either the seller or the purchaser. In preparation for this event at our law firm, consider the following pointers to facilitate a smooth closing:

For the seller:

1.  Call the receptionist (770) 623-6484 or your loan officer to find out which closing secretary in our firm is assigned to your file.

2.  Forward a copy of the warranty deed from your purchase of the property to the closing secretary.

3.  Provide us with a copy of your payoff information on any and all loans secured by your property, including:

  • loan account number;
  • lender's name, address and telephone number;
  • copy of payment coupon or most recent account statement.

4.  Anticipate in advance any possible problems regarding outstanding tax bills or liens on your property.

5.  If any current owner of the property is a party in a divorce proceeding or other legal action, advise the closing secretary as soon as possible.

6.  Request a termite clearance letter from your termite company.

7.  Please provide all relevant information regarding your Homeowners Association, such as contact person, yearly or monthly fees, mailing address, and any amounts paid or due.

For the Buyer:

1.  Send an original, fully executed contract to your lender and to the law firm.

2.  Decide whether you want to order a survey. Does your lender require it? Does the contract address this issue? In most instances, a survey is recommended whether or not your lender requires it. Your title insurance company may place limitations on its coverage if you do not have a survey.

3.  Anticipate how much money you will need to bring to your closing, and contact the law firm on the day prior to closing to confirm the amount needed. Remember, if the amount you owe is over $5,000, you will need to send a wire. Please see wiring instructions here.

4.  Plan to purchase owner's title insurance in addition to lender's title insurance, to protect the equity you have in your property.

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On Your Closing Day

Congratulations! If you have a scheduled closing, you have successfully negotiated your real estate transaction, the purchaser has obtained a loan, and you are close to reaching your goals. You can plan on your closing taking approximately one hour. If you have prepared for closing after reading this web site and there are no problems with the loan, your closing may take much less time than that. On the other hand, failure to prepare can significantly delay a closing.

To ensure that your closing takes place expeditiously please follow these guidelines and read the Helpful Hints For Smooth Real Estate Closings.

If you are the seller:

  1. Bring a photo ID.
  2. Bring a termite clearance letter.
  3. Bring corporate seal and original corporate resolution, if you are executing documents on behalf of a corporation. If you are signing for a Limited Liability Corporation (LLC), bring the LLC seal if you have one, and a copy of your LLC Operating Agreement.
  4. Bring original Power of Attorney, if you are signing on behalf of an absent seller. Please review If You Cannot Attend your Closing for more information on Power of Attorney.
  5. Bring keys, home warranty documents, garage door openers.

If you are the buyer:

  1. Bring a photo ID.
  2. You may only pay by wire unless the amount is less than $500. This form of payment is the most preferable and reliable. Also bring your checkbook to pay additional amounts if the certified check is less than what is due.
  3. Please wire your funds at least twenty-four hours in advance of your closing. Remember that wiring funds is not like e-mail! It often takes a full day from the time the wire is sent before it is confirmed in our bank account. Without the funds, we cannot close your loan.
  4. Click here for wiring instructions:

If you have any questions, please give us a call us at 770-623-6484.

PLEASE NOTE:These instructions must show completely on the wire sent. Failure to follow these instructions could result in a delay of the wire transfer and the closing.

5.  Bring original Power of Attorney, if signing for an absent buyer. Please review If You Cannot Attend your Closing for more information on Power of Attorney.

6. Bring homeowner's insurance policy and paid receipt or an invoice so we may mail the payment.

7. Bring the contract with all exhibits and addenda fully executed with original signatures, for the closing attorney's file.

8. Provide a way to contact your loan officer in case questions arise.

9. All documents required by your lender as a condition to close should be brought to closing and/or evidence you have provided these documents to your lender prior to closing.

10. It is a good idea to bring the originals of anything you have previously faxed to your lender.

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Why you Need Title Insurance

Title insurance protects the policy holder in the event a third party makes a claim to the title of the property. A title examination is prepared prior to your closing, and presumptively there will be no title problems when you close. However, there are several scenarios that can cause defects in title to property that are undetectable by a title exam. Here are a few examples:

a. Suppose Mr. and Mrs. Smith own the property jointly, but Mr. Smith forges Mrs. Smith's signature on the deed, conveying the property to you. If Mrs. Smith sues for the property, she wins, you lose. A forgery is not discernable in a title exam.

b. Similarly, suppose Mr. Smith engaged in a fraudulent conveyance to you by pretending to be the property owner, Mr. Jones, when in fact he was not. Fraud is not discernable in a title exam either.

c. If your builder fails to pay a subcontractor, the subcontractor may file a lien on your house to collect his money. Although the lien is filed a month before your closing, it may not be listed on the courthouse index for several months. Therefore, the title examiner would not be able to find that lien in his title exam.

d. Assume again that the subcontractor files a lien on your house but the lien has been mis-filed in the county records, the lien is valid but not apparent to the examiner.

In the event a third party makes a successful claim on your title you could lose your home. Even if someone makes a claim to your property that is ultimately determined by a court to be invalid, your legal fees to defend that claim will be significantly more than the one-time cost for your coverage.

When you receive a Good Faith Estimate from your lender, you will see a charge for Lender's Title Insurance . As a condition of the loan, the lender will require this coverage to protect the loan amount. However, the lender's title insurance does not cover your equity in your house. You will have the option at closing to purchase Owner's Title Insurance . The cost of title insurance is a one-time fee at closing determined by a rate chart issued by the title insurance company. The policy is effective for as long as you own the property.

Please note that Owner's Title Insurance is usually not included on your Good Faith Estimate because it is not a requirement of your lender. Our firm, however, will include the charge for that policy on your Settlement Statement. You may elect to refuse the coverage at closing. Be sure to discuss Owner's Title Insurance with your agent or another real estate professional.

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Why you Need a Survey

A few years ago, lenders usually required a survey of the property as a requirement of obtaining the loan. Today, most lenders no longer require the purchaser to get a survey. However, even if your lender does not require it, you may want to purchase a survey because of the many benefits it offers.

A survey is a map of your property, showing precisely where your house lies within the property boundaries, as well as easements, set back lines, building lines and other encumbrances. A survey will reveal whether the property is in violation of any county requirements or PUD restrictions and whether there are any encroachments on the property. Surveys are prepared by professional, licensed surveyors pursuant to industry standards.

Purchasers sometimes mistakenly believe that since they are buying new construction there will not be any encroachment issues. Builders often unwittingly create driveway encroachments during construction that are revealed by a survey. Building setback violations are also frequently caused by builders and exposed with a survey.

Even if your subdivision plat is recorded at the county courthouse, you still need a survey. The subdivision plat only shows the boundary lines of the lots and the placement of setbacks and easements. It does not display the boundary lines of your house on your lot.

Purchasers of fee simple townhouses sometimes incorrectly assume that a survey is not necessary. Remember that townhouses can just as easily be built in violation of setback requirements or encroaching upon easements.

It is also important to note that a survey conducted for the seller at the time the seller purchased the property is not a protection for a subsequent purchaser. A purchaser must have his or her own survey conducted.

If you are planning to purchase owner's title insurance, your policy will offer more extensive coverage if you have a survey. Generally, title insurance companies do not insure against matters that would be disclosed on a survey. If you purchase a survey, however, your title insurance company will usually insure that the survey is correct.

If you want a survey prepared, you should make arrangements for the survey with our office immediately so that the survey can be completed and reviewed before your closing. This allows time to address any problems, pursuant to your contract with the seller, a survey might reveal.

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If you Cannot Attend Your Closing

Sometimes it's hard to get all buyers, all sellers, the agents and the lender together at one time for a closing. Unforeseen emergencies can interrupt even the best-laid plans. In the event you cannot attend your closing you must execute a Power of Attorney . This is a written document authorizing another person to act as your agent and sign on your behalf.

If you suspect that you will not be able to attend your closing, call our law firm immediately. If you are a borrower, we must call your lender and be sure they will accept a valid Power of Attorney on their loan documents. We can prepare a Power of Attorney on behalf of the lender for you to review. Although forms available on the web or at office supply stores are convenient and, sometimes, free, they will most likely not comply with the Georgia real estate Power of Attorney requirements. A Power of Attorney to transfer real property must be specific to the property , referring to the property particularly. Furthermore, the Power of Attorney must be witnessed and notarized . Of course, the witness cannot also notarize the document, and neither can be a party to the transaction or the nominated agent.

Once the document is fully executed you should fax a copy to us. But, we must have the original at the closing. Without the original, the closing cannot go forward. A copy of your photo ID must also accompany the Power of Attorney.

Finally, be sure that you can be reached by phone during the closing in the event material issues arise that require your attention.

Helpful Hints for a Smooth Closing

  1. Read your contract again prior to closing. Your closing attorney is obligated to close the loan strictly per the contract terms.
  2. If the parties have revised the terms of the contract, have all addenda and exhibits prepared prior to closing, fully executed in advance, and make sure the law firm, the lender, the parties and the real estate agents all have contracts with all attachments. Your closing may be delayed when additional addendum are not prepared and executed until everyone arrives at the table.
  3. Wired funds are not magic! When lenders or buyers wait to wire funds the morning of the closing, the funds may not reach us in time for the closing. Before a closing can be completed the transfer of funds must be confirmed in our bank account. A banker's notation in California that funds were wired is meaningless without evidence that the wire transaction has been completed in Georgia.
  4. Bring certified funds to your closing - not personal checks.
  5. Know that the closing attorney's role at closing is to represent the lender's interest and the closing attorney is not authorized to provide legal advice to the buyer or the seller. Feel free to consult with your own attorney, if legal advice is needed.
  6. Handle disputes regarding contract terms, price negotiations, misunderstandings with loan officers, repairs and costs set-offs outside of the closing.
  7. You have a right to read all of your closing documents before you sign. If you wish to read each document, let us provide the documents to you the day before your closing so that the actual closing can proceed in a timely manner once all parties and agents have arrived. The closing attorney will give you concise explanations of each document, whether or not you have read them completely. And remember, the closing documents must be executed because they are required by your lender. Once you determine that the figures on your Settlement Statement and the terms of your note are correct, very little, if anything, is negotiable at the closing table.
  8. Similarly, for seasoned buyers, if you are pressed for time and want to move quickly, let your closing attorney know at the start of your closing and the explanation and signing process can be expedited to accommodate your schedule.
  9. Transfer tax is paid in accordance with the terms of the contract. Do not assume that the seller always pays it as a matter of "law".
  10. Generally, if your closing is scheduled for a Friday or during the last day or two in a month, many lenders heavily schedule closings. If you have control over when you can close, you might prefer to request an early morning time or a day other than the end of the month.
  11. Verify with your loan officer, in advance of closing, your interest rate, loan program and estimated closing costs to avoid any unhappy surprises at your closing.
  12. Remember that your "Good Faith Estimate" is merely an "estimate" and may not include some items that appear in the final calculation, such as owner's title insurance and homeowners' association dues.

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If you are Refinancing

A closing for a loan refinance is much like your closing experience when you purchased your home. The lender's documentation that you must sign will be very similar to your original loan. However, only you, your lender or mortgage broker and the closing attorney will be present for the closing.

In order to prepare for your closing, we must obtain certain information prior to the closing:

  1. Your new lender will require Hazard Insurance covering the loan amount. Please provide us with your insurance agent's name, telephone number and annual premium amount. Without this coverage, you cannot get a loan!
  2. Our office will obtain payoff statements from your existing mortgage company (or companies) . In order to do so, we must have the name and phone numbers of each of your lenders and your loan numbers for each loan to be paid off.
  3. Please provide your social security number . Without it, we cannot obtain your payoff amounts from your lenders.
  4. If you are in a subdivision, we will need a contact person with your Homeowners Association to ensure that your obligations are paid and make proper prorata credits if already paid.
  5. Some lenders require a termite letter as a condition of the loan. Please confirm whether your lender requires it or not. If so, you must provide that letter to us prior to your closing for our review.

On the day of closing please bring these items:

  1. You and any co-borrowers on the loan.
  2. If you owe money, remember to wire your funds if the amount you owe exceeds $5,000.
  3. Your lender may require that you pay off other accounts at the closing. If so, bring payoff documents or account statements to ensure that we have the correct information.
  4. If your lender has made any other conditions to your loan, please bring the original copies even if you have already faxed them to us.
  5. A photo ID is required just as it was with your original loan.
  6. In the event the amount you owe varies from the amount you prepared to pay, please bring your checkbook .
  7. If your lender required a termite letter , please bring the original even though you have already faxed it to us.

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Terms and Definitions Relevant to Your Real Estate Closing

Annual Percentage Rate:
Also referred to as APR, this is the cost of credit expressed as a yearly rate. It is a technical calculation that incorporates the costs of obtaining your loan. Therefore, it is often slightly higher than the interest rate on your note. You will see it expressed on the Truth-in-Lending Disclosure Statement.

Attorney Fees:
The law firm that conducts the closing on behalf of the lender charges a fee for their services, listed on the Settlement Statement.

Escrow Account:
To protect its interest in your property, your lender will establish an escrow account to collect for your annual tax bill and your annual hazard insurance premium. Each month you will write one check to your lender in an amount equal to the principal and interest on your note, one-twelfth (1/12th) of your estimated annual taxes and one-twelfth (1/12th) of your insurance premium. The tax and insurance payments are set aside in an escrow account that builds over the year. When your taxes are due, the lender issues a check to the taxing authority and when your hazard insurance is due, the lender issues a check to the insurance company out of that escrow account. Under certain circumstances and for a fee, a lender may waive escrow requirements if requested at the time you apply for your loan.

Foreclosure:
If you fail to pay your mortgage, state law provides a procedure for the sale of the property securing the note, thereby satisfying the obligation. In Georgia, foreclosure is a non-judicial process. That is, the lender does not have to sue the borrower in court and obtain a judgment against the borrower. Rather, Georgia permits the lender to provide legal notice to the borrower, then sell the property at public auction. (See O.C.G.A. §7-1-1014)

Good Faith Estimate:
Your lender will provide to you a Good Faith Estimate disclosing all the estimated amounts and types of costs you should expect to pay in order to consummate the loan. It generally reflects the same format as the final Settlement Statement. Please remember, although the estimate must bear a reasonable relation to the actual costs, it is only an estimate. Be prepared for the final figures to vary somewhat.

Hazard Insurance:
Hazard insurance is the homeowner's insurance that covers the real property from fire and other casualties. It is a requirement on all real estate purchases that involve improved property. The premium for the first year is usually charged to the buyer on the Settlement Statement, collected at the closing, and paid to the insurance company. The lender then collects one-twelfth (1/12th)) of the annual premium amount each month, accumulates these funds in your escrow account and renews that policy the following year.

HUD-1 (Settlement Statement:):
The Real Estate Settlement Procedures Act (RESPA) requires the use of the HUD-1. It is a uniform settlement statement setting forth the accounting of funds from a real estate sale, made to both the seller and the buyer separately. All charges imposed on the borrowers and the sellers are itemized on the form.

Intangible Tax:
You must pay to the state this tax for recording the security instrument. You must pay $3.00 per $1000 based on the amount of money you are borrowing. It will be included on the Settlement Statement.

Mortgage Insurance:
Frequently called private mortgage insurance, or PMI, this insurance protects the lender against nonpayment or default on the loan. It is often a condition of the loan if you are borrowing more than 80% of the property value to purchase the home. Under certain loan programs and conditions, you have the right to request cancellation of PMI once the principal balance of your loan reaches 80% of the property value.

Note:
The written instrument that acknowledges a debt and a promise to pay is commonly known as a note. It contains your loan amount, interest rate, first payment date, maturity date, principal and interest amount due monthly and any penalties for late payments. It can be a fixed or adjustable rate, the terms of which are disclosed in the note.

Planned Unit Development (PUD):
A PUD is a property wherein a parcel of land is improved with a dwelling, together with other such parcels, common areas and facilities recorded in the county plat book. Most neighborhoods are PUDs and require that you agree to be bound by the neighborhood covenants, conditions and restrictions.

Prepaid interest to the lender:
The interest on your note is always paid in arrears. In other words, the current month's payment includes last month's interest. On the date of closing, you will pay the interest from the date of closing through the end of that month, known as prepaid interest.

Post Closing and Handling Fee:
Our firm charges this fee to cover several expenses, such as handling fees and in some instances, reimburses the law firm for certain out-of-pocket fees and additional expenses incurred to deliver and record documents and assignments. This fee is part of the firms overall compensation for conducting the closing.

Pro-ration of Taxes:
Most counties in the Atlanta area collect the annual property tax in the fall. Whoever owns the property on the due date must pay for the entire twelve months. Therefore, the annual taxes are prorated between the buyer and the seller as of the closing date. Your portion will show as a credit or a debit depending on several factors including whether you close before or after the taxes are due.

Termite Letter:
In Georgia, like many states, termites are a problem. Sales contracts usually require that a termite letter indicate that the property is free and clear of termites or that a termite bond is provided at the closing. In fact, the lender may require a termite letter as a condition of the loan regardless of the terms of the contract. The failure to obtain the termite letter or a termite letter indicating termite damage, will likely halt or significantly delay the closing. The termite letter should be obtained early so that any infestations can be corrected prior to closing.

Title Examination:
A title examiner will conduct a search of the county property records to determine its ownership. Title exams may reveal defects in the title such as breaks in the chain of title, errors in prior recorded deeds, name variances, unsatisfied or unreleased liens, mechanic's liens, judgment liens, or tax liens, to mention a few.

Title Insurance:
A title exam is only as good as the examiner's ability. Furthermore, some problems are simply not discernable to a title examiner, such as forged signatures, missing heirs to property, wills not yet probated, deeds executed by minors, indexing mistakes, and confusion due to similar names. Title insurance insures against loss caused by these types of defects. Your lender generally requires lender's title insurance as a condition of the loan and it protects the loan amount. However, as the owner, your interest is insured only through a separate policy called owners title insurance. In Georgia, owner's title insurance is optional, but highly recommended. It is a one-time fee at closing.

Transfer Tax:
Transfer tax is not a property tax. Rather, it is an excise tax on the privilege of selling property. It is paid at a rate of $1.00 per $1000 of the purchase price. Although customarily paid by the seller, either the buyer or the seller may pay the tax as set forth in the sales agreement. It will appear on the Settlement Statement.

Truth-in-Lending:
Federal law requires that lenders provide consumers with information for their use of credit. Lenders must disclose to the borrower the true costs of a loan which is shown on the Federal Truth-in-Lending Disclosure Statement, a document you will sign at closing.

Waiver of Borrower's Rights:
This document is signed at the closing and is an acknowledgement by the borrower that the lender has the right to accelerate the debt and initiate a foreclosure proceeding upon default by the borrower without taking the borrower to court.

Warranty Deed:
The warranty deed is the written document that transfers ownership of the property from the seller to the buyer. It assures good title to the property, freedom from encumbrances, and quiet enjoyment.

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Real Estate Newsletter

Title Insurance

Title refers to both the rights of ownership of a particular property and the documents that prove the existence of those rights. Marketable title means that the property's ownership, as reflected in the real estate records, has no problems or only minor problems that any well informed and prudent buyer would accept. Any buyer of real property obviously wants and expects to receive clear title to the property. The buyer expects, for example, that the person selling the property has the right to do so, that all of the owners have joined in the sale, that all mortgage and other liens have been paid (or will be knowingly assumed as part of the transaction), and so forth.

Title insurance, as the name implies, is an insurance policy, usually issued for a one-time fee at the time real property is purchased, which insures against title problems. If the property being purchased is secured by a mortgage, generally, the lender will require title insurance in the amount of the mortgage loan. It is important to understand, however, that the lender's policy or mortgagee policy protects the lender and does not protect the buyer of the property. For the purchaser of the property to have protection, an owner's policy is required.

The owner's title insurance policy provides two types of coverage. First, if ownership of the property is contested, the title insurer will defend the title at no expense to the owner and attempt to eliminate the title defect. Second, if it turns out that there is a title defect that cannot be eliminated; title insurance protects the owner from financial loss up to the amount of the policy (which is generally issued in an amount equal to the purchase price of the property).

One alternative to title insurance is an attorney's title examination of the property. This involves an attorney reviewing the legal history of the property and other relevant federal, state, and county records to determine the owners of record, and the existence of any present or past mortgages, court judgments, probate proceedings, divorces, foreclosures, tax and construction liens, and other matters that could affect title. If the attorney's title opinion reveals problems, the seller will then be required to correct the problems prior to closing the sale. An attorney's title opinion will reveal most common title defects and can in some circumstances be less expensive than an owner's title insurance policy, particularly in cases where the buyer is not required to purchase a lender's title insurance policy as part of the transaction.

On rare occasions, however, a real estate title may contain hidden defects that do not surface even in the course of a thorough title examination. One example would be the existence of a forged deed or satisfaction of mortgage in the chain of title. In such a case, title insurance would cover the buyer against any loss resulting from the forgery. The purpose of title insurance is to secure the owner's rights to property and protect the owner from a hidden defect of this nature. If the owner is forced to defend his or her title in court, the insurer agrees to pay the costs necessary to resolve the problem. Many law firms specializing in real estate law are affiliated with title insurance agencies and can issue title insurance policies. This provides the consumer with the best of both worlds, as a title insurer not affiliated with a law firm does not represent the consumer's legal interests and cannot provide legal advice.

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What Happens if you die Without a Will in Georgia?

If you do not make a will or use some other legal method to transfer your property when you die, state law will determine what happens to your property. This process is called "intestate succession." Your property will be distributed to your relatives according to a statutory formula.

In the state of Georgia, the rules of inheritance if you die without a will are as follows:

A. If you are married without children, your spouse will inherit your entire estate.

B. If you are married with children, your spouse and children will share equally your estate with the spouse entitled to no less than one-third of your estate. So, if you have one child with your spouse, they each will receive fifty percent (50%) of your estate. If you have four children and a spouse, your spouse will receive one-third (1/3rd) of your estate and the four children will share equally the remaining two-thirds (2/3rd).

C. If you are not married but have children, the children will inherit your estate, shared equally between them. Please note that if a child of yours is deceased but has living children, those living children will inherit your deceased child's share. This is called distribution "per stirpes".

D. If you do not have a spouse and do not have children, then your parents will inherit your estate.

E. If you do not have a spouse and do not have children and your parents are deceased, then your siblings will share equally your estate, per stirpes.

F. Assuming the facts in E above, but you have no siblings, then your grandparents will share your estate equally.

G. If your grandparents are deceased, then your uncles and aunts will be entitled to your estate.

H. If no relatives can be found to inherit your property, it will go into your state's coffers.

This may or may not be how you would like your estate to be distributed after your death. Furthermore, each state has specific rules of inheritance set forth by statute. This is the scheme in Georgia, but it may be dramatically different in another state.

There are several other factors that you should know regarding intestate succession. For example, in Georgia a child born out of wedlock may inherit from his/her mother in the same manner as a child born to a married woman. However, that same child is not entitled to inherit from the father unless certain steps are taken. Please see O.C.G.A. §53-2-3 for further details. Children conceived by artificial insemination are presumed to be legitimate and therefore, entitled to inherit under the laws of intestacy.

If your spouse dies without a will, and then you die within six months of that time without a will, the property from your spouse that you would have received goes to your spouse's heirs, not yours, even though you outlived your spouse.

These are only a few examples of what can happen without a will. To ensure that your property is distributed according to your intentions, need a will!

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Why you Need a Will

There are some erroneous beliefs out there regarding the need to have a will. Let's set the record straight:

You need a will even if you think you "don't have anything". A will governs much more than the simple distribution of your bank account funds. For example, a will provides the opportunity to select a guardian for your minor children. Without that provision, upon your death the state may decide who takes on that very important task. Isn't that a choice you would prefer to make yourself?

If you are assuming that your spouse "gets it all" you may be wrong! In fact, in the state of Georgia, if you die without a will, your estate is divided between your spouse and your children under the laws of intestacy.

Furthermore, the intestacy laws do not govern specific items in your estate. Do you want your grandmother's diamond ring that she left you, going to your brother's wife or your daughter at your death? These issues can be determined in a will eliminating a potential controversy between your survivors.

Another misconception is that a will is an administrative nightmare for your executor and more trouble than it is worth. In Georgia, probate is a simplified process. The will allows you to select the person you want to manage your affairs. If you die without a will, the court will have to select an administrator who will probably have to post a surety bond, likely more trouble than the executor would have under your will.

Please consider these factors and write a will!

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Why you Need an Advance Directive

A Healthcare Power of Attorney permits you to select an agent to make critical decisions regarding your healthcare if you are incapacitated and cannot act for yourself. If you are in critical condition due to an accident or disease, your agent can communicate your desires to medical personnel to assure your care reflects your intentions under the circumstances.

Generally, a Healthcare Power of Attorney describes certain life prolonging treatments. You select which treatment you do or do not want applied in the event you are suffering a terminal illness or are in a permanent vegetative state.

This document is more extensive and replaces what historically has been called a Living Will. A Living Will is only operative if your ultimate recovery is hopeless. A Healthcare Power of Attorney is also effective in situations which appear terminal as well as when your incapacity is likely to be only temporary.

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Why you Need a Financial Power of Attorney

A Financial Power of Attorney allows you to select an agent to act for you in the event you are incapacitated for any reason. For example, if you are hospitalized and physically cannot write checks to pay your monthly bills, including your mortgage, your agent can keep your financial life in order until you have recuperated.

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TERMS AND DEFINITIONS RELEVANT TO YOUR WILL

Administrator
The administrator is that person appointed by the probate court and qualified to administer an estate of someone who has died without a will.

Beneficiary
The beneficiaries of a will are those designated to take an interest in real estate and/or personal property. The beneficiary may be a person or a trust.

Codicil
A codicil is an amendment or a republication of a will. If you change your mind regarding a specific gift or selection of executor, for example, you may write a codicil to your will rather than writing the entire will again. A codicil requires the same execution formalities as your will.

Descendants
The lineal descendants of an individual include those who are born or adopted by the decedent.

Estate
Your estate is all that property, personal and real, in which you have an interest. It includes everything you own, from tangible property such as jewelry, cars, land, and buildings to intangible holdings such as stocks, bonds, and insurance proceeds.

Executor
The executor of a will is the person nominated in a will who has qualified to administer a testate estate. The executor disposes of the property according to the provisions in the will and the directions and requests made by the testator.

Guardian
A guardian represents someone to a probate court proceeding. Usually, a guardian is appointed to represent minors or incompetents. In a will, a guardian may be selected to care for minor children.

Heir
Heirs are those individuals who survive the decedent and are determined under the rules of inheritance to take the property of the decedent if the decedent died without a will. (If a will was in place, those receiving property are called beneficiaries.) Each state has different rules of inheritance determining who shall receive property from the decedent's estate. See If you Die Without A Will, click here.

Probate
When a will is probated, it is proven to a court with jurisdiction, that the will presented is valid. Each state has certain procedures to probate a will. The executor appointed in a will (or the administrator if there was no will) is responsible for probating the will.

Testator
The testator is one who makes a will, and dies with a will.

Trust
There are many forms of trusts. Generally, a trust is a right of property, real or personal, held by one party for the benefit of another.

Trustee
That person appointed to execute a trust. The trustee is selected to manage the trust property for the benefit of another.

Will
This is the legal declaration of an individual's testamentary intention regarding property or other matters. The will includes all codicils.

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