What Estate Planning Documents Should I Have?

Having an estate plan is more than listing who gets what when you pass away.  A complete estate plan will protect your assets and ensure that you are provided for during periods of incapacity or disability.  In order to accomplish this, I offer a complete legacy package plan that includes the following documents that should be incorporated into every estate plan:

Last Will and Testament

Most estate plans include a Will based or Trust based testamentary document.  A Will allows you to: (1) state who you wish to inherit your property, and (2) appoint a guardian for minor children. A properly drafted Will also names a trusted executor to ensure your wishes are properly carried out.  Without a Will, decisions regarding your property and the care of your children will be determined by state law and put in the hands of judge with no background knowledge of your unique situation and wishes.  While important, a Will is limited in what it can accomplish.  A Will has no effect until you pass away.  Therefore, a Will does not provide for you during periods of incapacity.  Further, A Will cannot control your property beyond stating who you wish to inherit them.  A Will does not protect your property from creditors or avoid probate.

Revocable Living Trust

The Revocable Living Trust (“RLT”) is also a testamentary document.  However, this document allows more planning flexibility and can protect your assets from creditors and the probate process.  The RLT is usually the essential foundation of an estate plan. In addition to stating who you wish to receive your assets when you pass away, a RLT allows you to place conditions on when and how your assets are distributed and used. This is often important for providing for minor children and ensuring that your assets are used carefully and in a way that you approve of.  With a RLT, a trustee will be named to ensure that the provisions of the RLT are followed.  All assets held in trust at the time of the grantor’s death will be distributed by the trustee and avoid lengthy and costly probate proceedings. 

Beneficiary Designations

If you own a life insurance policy or have financial accounts, you need to name a beneficiary that you want to inherit the proceeds when you pass away.  A beneficiary designation takes precedence over provisions in a will.  Therefore, beneficiary designation documentation should be included in your estate plan to ensure they are secured and easy to access. 

Financial Power of Attorney

A financial power of attorney ensures that a trusted person (called your “agent”) will be available to manage your finances and legal obligations in the event that you are unable to do so yourself.  Having a financial power of attorney will also save your loved ones the headaches of trying to handle your finances without legal authority to do so. This is a must have document that should not be put off. Once you are no longer legally competent to take care of your finances, it will be too late to assign this role to someone else.

Health Care Power of Attorney

A health care power of attorney is similar to a financial power of attorney in that it appoints a trusted agent to act on your behalf when you can no longer do so.  However, the health care power of attorney is limited to medical decisions. This document is separate from but should be used in addition to your living will mentioned below.  

Living Will

A living will allows you to expressly state your wishes regarding life sustaining medical treatment.  The living will is generally limited to treatment related to life support and pain management.  However, you can also outline your organ donor status in this document.  It is critically important that you have this document to spare your loved ones from making difficult decisions about your health with no guidance.

Final Arrangements Plan

Similar to a living will, expressly stating your wishes regarding your final arrangements will spare your family from making difficult decisions with limited or no guidance.  Further, this will prevent conflict between family members about how your final arrangements should be conducted. Thinking about what you want to happen to you when you die is emotionally taxing and often put off for another day.  However, having a plan in place before death becomes more foreseeable will make these decisions much easier. 

HIPAA Authorization Form

A HIPAA Authorization Form is an often-overlooked document that can become very important to your loved ones.  This document will give medical providers advanced notice of who you wish to be able to receive updates on your medical condition and have knowledge of what medical treatment you are receiving.  For example, if you are suddenly in a hospital and are unable to talk, a HIPAA authorization form allows loved ones that may live hours away the ability to receive updates on your condition right away.

Pour-Over Will

Every estate plan that includes a trust should also have a pour-over will.  A pour-over will is designed to ensure that any assets the grantor neglected to add to the trust will still end up in the trust after the execution of the will.  This can help with the efficient and smooth administration of the trust and ensure that the trust is still able to distribute all assets as intended. 

List of Important Documents with Instructions

Finally, every estate plan should include a list of important documents such as life insurance policies, annuities, financial accounts, real estate records, birth certificates, etc. with instructions on where each document is stored and how to access them. This will simplify the administration of your estate and make the process easier for your loved ones.

This is a basic but by no means complete list of documents you should have prepared. Taking the time to put an estate plan together now will save you and your loved one’s stress and money in the long run. Please contact me today if you have any questions about these documents or how an estate plan can benefit you.