What Is Included in an Estate Plan?
A basic Will-based estate plan should contain the following documents:
Last Will and Testament: names a guardian to care for minor children, a conservator to manage any assets left to minor children, a personal representative to administer the deceased person’s estate and handle a probate if necessary and states a distribution plan for the person’s assets.
Health Care Power of Attorney: names an agent to make health care decisions for another person (the “principal”) if the principal becomes ill or incapacitated and unable to make those decisions on their own. A Health Care Power of Attorney may also include a Mental Health Care Power of attorney allowing the agent to make decisions pertaining to the principal’s mental health. A Health Care Power of Attorney should also include language allowing the agent to access the principal’s federally protected health care information (HIPAA). This language can also be included a separate HIPAA Waiver.
Durable Power of Attorney: names an agent to manage the principal’s finances and other aspects of the principal’s life if the principal is unable to do so on their own due to illness or incapacity. This means that the agent can pay the principal’s mortgage and medical bills, manage the principal’s business and do tasks on behalf of the principal.
Living Will: states end-of-life medical wishes about aggressive treatment in situations where the person is suffering from a terminal condition or a persistent vegetative state. This document is sometimes referred to as a do-not-resuscitate document.
Additional documents should be included with an estate plan with a Trust:
Revocable Living Trust: a document is created during a person’s lifetime (the “trustmaker”), is fully amendable and revocable during the trustmaker’s, and creates an entity called a trust to hold the trustmaker’s assets. The trustmaker names one or more successor trustees to manage the assets in trust if the trustmaker becomes incapacitated and after the trustmaker’s death. A Trust also contains the trustmaker’s distribution plan which can delay or stage the distribution of assets to young beneficiaries (example: 1/2 at 25, 1/2 at 30) or leave assets in trust to be used for the benefit of the beneficiary yet remain asset and creditor protected. A properly funded trust may also avoid probate.
Certificate of Trust: a condensed version of a Revocable Living Trust that contains all of the pertinent information about a Trust a bank or other institution may need. This allows the trustmaker to keep the contents of their Trust private while providing institutions with the information they may need.
Assignment of Personal Property: executed with a Trust and immediately transfers all items of tangible personal property (jewelry, china, clothing, furniture, etc.) into the Trust.
Other important documents may include:
Personal Property Memorandum: in this document a person carves out specific items of tangible personal property, and states who should inherit which property items. People often use Personal Property Memorandums to dispose of sentimental items like jewelry, artwork, china and photo albums. A nice thing about using a Personal Property Memorandum is that if a person changes his or her mind, they can just destroy the old one and make a new one without having to amend their Will or Trust.
Funding Instructions: funding a Trust is essential if the trustmakers want to use the Trust to avoid probate. Funding instructions will include give detailed instructions on how to transfer common types of assets into Trust.
Beneficiary Deed: an easy way to transfer title of the trustmaker’s real property into Trust after death and effectively funds the trustmaker’s real property into the Trust.
