A good estate plan will typically include the following four documents. These four documents hen properly executed can ensure a smooth transition for your loved ones and ensure that your wishes shall be carried out if you pass on or become incapacitated. With properly drafted estate planning documents, your heirs should not have to hire an attorney or go to the probate court.This will save them thousands of dollars and years of bureaucratic headaches.
- Living Trust can be used to hold legal title to and provide a mechanism to manage your property. You (and your spouse) are the Trustee(s) and beneficiaries of your trust during your lifetime. Nothing changes with regards to how you (and your spouse) can sell or encumber your property. You also designate successor Trustees to carry out your instructions as you have provided in case of death or incapacity. Unlike a Will, a Trust usually becomes effective immediately after incapacity or death. Your Living Trust is “revocable” which allows you to make changes to it anytime and even to terminate it. One of the great benefits of a properly funded Living Trust is the fact that it will avoid or minimize the expense, delays and publicity associated with probate. Probate and executor fees can cost your heirs 4%-8% of the gross value of your estate(calculated before deducting any debts on estate property).
- If you have a Living Trust-based estate plan, you also need a Pour-Over Will. A Pour-Over Will is used first to name a guardian for minor children. Second, it protects against intestacy in the event any assets have not been transferred into the trust at the death of the Trustmaker/Owner. It will also invalidate any previous Wills which you may have executed. Its function is to “pour” any assets left out of the trust into it so they are ultimately distributed according to the terms of your Trust
- A “Durable Power of Attorney for Financial and Personal Affairs” allows you to carry on your financial affairs in the event that you become disabled. Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. This guardianship process is time-consuming, expensive, emotionally draining and often costs thousands of dollars. There are generally two types of durable powers of attorney: a “present” durable power of attorney in which the power is immediately transferred to your attorney in fact; and a “springing” or future durable power of attorney that only comes into effect upon your subsequent disability as determined by your doctor. When you appoint another individual to make financial decisions on your behalf, that individual is called an “attorney in fact”. Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend. Appointing a power of attorney assures that your wishes are carried out exactly as you want them, allows you to decide who will make decisions for you, and is effective immediately upon subsequent disability. The law allows you to appoint someone you trust – for example, a family member or close friend to decide about medical treatment options if you lose the ability to decide for yourself. Some medical providers have refused to release information, even to spouses and adult children authorized by durable medical powers of attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. Our Durable Power of Attorney for Financial and Personal Matters allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.
- An Advanced Health Directive or Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. Almost all states have instituted living will laws to protect a patient’s right to refuse medical treatment. Even if you receive medical care in a state without living will laws this document is useful to a court trying to decide what an unconscious patient would want. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity. A good estate plan will typically include the following four documents. These four documents hen properly executed can ensure a smooth transition for your loved ones and ensure that your wishes shall be carried out if you pass on or become incapacitated. With properly drafted estate planning documents, your heirs should not have to hire an attorney or go to the probate court. This will save them thousands of dollars and years of bureaucratic headaches.