estate plan

A COMPREHENSIVE ESTATE PLAN

In Blog, Estate Planning by casalmoreno

Most people believe estate planning is preparing documents to address inheritance issues at death.  However, a good comprehensive estate plan addresses death, taxes, and incapacity issues.

Documents for A Comprehensive Estate Plan

Will. 

The Will governs any property held in the client’s individual name at death.  It provides for the administration of that property. It also provides for the payment of your debts, expenses of administration, and estate taxes. If a trust is prepared in conjunction, then it is known as “pour-over Will”, and it directs that any property under the will be added to the Revocable Trust.

Trust Agreement. 

The Trust Agreement is the part of the estate plan that creates what is typically referred to as a “Living Trust.”  The Trust Agreement is entirely revocable and amendable by the client during their lifetime, but becomes irrevocable at death.

Any property that you transfer to the Trust during your lifetime will avoid probate upon your death.  Property that you do not transfer to the Trust will be subject to probate, but will pass to the Trust through the probate process (under your pour-over Will, described above).  The expectation is that you will transfer all your property to the Trust so that it will not be necessary to probate your Will.

The Trust Agreement contains the provisions governing disposition of property upon death.  It provides for gifts, creates trusts, names successor trustees, and sets forth your instructions to the trustees.  Your important estate tax planning is also accomplished through the Trust.

Most clients are the initial trustee of their Trust.  They reserve the right to remove and appoint trustees during their lifetime and to designate who will serve as trustee in the future.

Durable Power of Attorney. 

The Durable Power of Attorney names your chosen representative to serve as attorney-in-fact, to deal with matters affecting your property.  You give your attorney-in-fact the power to act on your behalf with respect to your property. Therefore,  the document spells out numerous types of transactions to eliminate any question as to the broad scope of their authority.  You authorize your attorney-in-fact to continue to act while you are incapacitated (if a guardian is not appointed for you).

Designation of Health Care Surrogate. 

The Health Care Surrogate names your chosen representative within the estate plan to act if you become unable to make medical decisions for yourself.  You should review this document carefully, to reflect exactly your wishes.

Living Will. 

The Living Will is a statutory form. You use it to state your wishes regarding the use of life-sustaining measures if you become terminally ill.  The Living Will works with the Designation of Health Care Surrogate. The two together provide a full set of directions to your physician.