What is a complete estate plan?

Many people know that they need an estate plan but are not sure what exactly that means or how to get started. A comprehensive estate plan should not just address what will happen to your assets after you have passed, but ensure that you have named the individuals who can assist you with your financial and medical decisions while you are living. Consider each of the documents identified below when you are preparing your own estate plan to ensure that your plan addresses all of your needs.

Revocable Trust and Pour-Over Will

A Revocable Trust is often the cornerstone of a comprehensive estate plan. A Revocable Trust will govern the distribution of your assets upon your death, and any assets held in your Revocable Trust will avoid probate. The specific provisions of your Trust will depend on your wishes and family situation, but a Revocable Trust can allow you to delay the point at which your beneficiaries will inherit and to choose who will manage any assets until your beneficiaries have reached that specified age. Contrary to popular belief, whether you need a Trust is not determined primarily by the value of your estate, but by your family situation. An estate planning attorney can assist you in determining whether a Revocable Trust makes sense for you.

If a Revocable Trust forms the cornerstone of your plan, you should also have a Pour-Over Will in place. A Pour-Over Will directs any assets owned in your name at your death to your Revocable Trust at your death. If you have minor children, the Pour-Over Will is where you would name guardians to care for them if you are unable to do so.

Last Will and Testament

If you have assets at just a few institutions, your desired distribution plan is straightforward and involves relatively few people, and you do not have any minor beneficiaries, you might not need a Trust. A Last Will and Testament could be more appropriate.

A Last Will and Testament provides instructions for a probate court as to how you would like your assets to be distributed. Every state has laws that specify how your assets will be distributed upon your death if you do not have another plan in place. A Last Will and Testament is your opportunity to specify how you would prefer that your assets be distributed at your passing.

If you have minor children, your Last Will and Testament is where you would nominate guardians to care for them if you were unable to do so.

Durable Power of Attorney for Finance

A Durable Power of Attorney for Finance allows you to name an agent or agents to handle your finances for you. Typically, the named agent has broad authority to act on your behalf, including managing your financial accounts, buying or selling property in your name, or signing contracts on your behalf. A Durable Power of Attorney is important to have in place so that you have named someone to tend to your affairs if you are unable to do so yourself.

Health Care Authorization, Declaration, and Power of Attorney

A comprehensive set of documents to address your health care is a critical part of any estate plan. Your Health Care Authorization (commonly referred to as a “HIPAA Waiver”) authorizes your health care providers to disclose your protected health information to specified individuals. Your Health Care Declaration (sometimes called a “Living Will”) informs your family, physicians, and all health care providers of your wishes regarding end-of-life care. A Durable Power of Attorney for Health Care allows you to name an agent or agents to assist with your medical decisions if you are unable to make those decisions for yourself.

Beneficiary Deed or Transfer on Death Deed

Many states allow for beneficiary or transfer on death deeds which direct the distribution of real estate upon the owner’s death. These types of deeds do not affect present ownership of the real property, but allow the transfer of the property to your named beneficiaries upon your passing, without the need for probate.

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An estate planning attorney can assist you with your specific family situation and ensure that your estate plan will accomplish your goals.