Proven Partners For Financial Health

What is an estate plan?

On Behalf of | Jan 6, 2022 | Estate Planning

When most people think of estate planning, they think of Wills. While a Last Will and Testament is an important part of an estate plan, it is only one document, which does not provide an individual or family with all of the tools necessary to adequately protect their family’s future. An estate plan is a comprehensive collection of documents that work together to ensure your wishes are honored, and your family’s well-being is secured to the full extent possible. Below is a brief description of the most common estate planning documents, which most families need.

Revocable Living Trust

Any assets not accounted for by a trust must be distributed through the courts in a legal process called probate. A revocable living trust is a tool to plan for how your assets will be managed and distributed to your loved ones (“beneficiaries”) upon your death or incapacity. A trust can also outline important directives, such as who will care for your minor children if you are no longer able to through the use of an accompanying Will. If properly funded, an individual or individuals appointed by you (“trustee(s)”) can manage your estate, make distributions to your beneficiaries, and carry out your directives without the involvement of the court system.

Trust Documents

In addition to the trust itself, we will provide several accompanying documents to assist in funding your trust (discussed below), as well as to give authority to the Trustee(s) you select to manage your affairs once you are no longer able. These documents include:

  1. Certificate of Trust – This is a short document signed by the trustee that states the Trust’s essential terms and certifies the Trust’s authority without revealing private details that are not relevant to the pending transaction.
  2. Affidavit of Trust – This is a document used to prove the existence and certain terms of a trust, without disclosing the particulars of a trust plan. Along with specific pages from the Trust, it contains all the information that will be needed for conducting transactions with others.
  3. Trust ID Cards – Trust identification cards are simply wallet-sized quick access documents that include the name of the Trust, trustee(s), and other information necessary when managing affairs with banks and other financial institutions.
  4. Trust Funding Instructions – Once your Trust is created, your assets must be directed to it. This documentation will help you to make all the necessary changes with your existing assets, as well as to guide you in how to direct any future assets to your Trust you may acquire.
  5. Assignment of Personal Property: This document is necessary to transfer all your personal belongings to the Trust. This ensures that you can gift, divide, or otherwise distribute your personal property as you see fit.
  6. Personal Property Memorandum: Many of us have personal belongings we would like to give to someone when we pass on. This gift is called a “specific devise.” Your Trust will include a document that will allow you to direct your belongings to the individuals you want to have them. Anything not devised of this way can otherwise be divided among your beneficiaries as you wish.
  7. “Pour-Over” Will: The intention of a Trust is to distribute all your assets as you see fit. However, if there are any assets that have not been directed to the Trust upon your death, your Estate Plan includes a “Pour-Over” Will, which gives you the ability to direct how you would like any of those other assets distributed through the probate court.

Durable Power of Attorney

The Durable Power of Attorney may be the single most important accompanying document to your estate plan. This document allows a person of your choosing to manage your affairs in the event you should become incapacitated. In the event there is no Durable Power of Attorney, your spouse or other loved one would have to petition the probate court for an appointment as your conservator and guardian, such a petition can incur a long and expensive process.

Healthcare Power of Attorney

Like the Durable Power of Attorney, the Healthcare Power of Attorney allows a person of your choosing to act as your “patient advocate,” giving them the power to make medical decisions on your behalf to the extent allowed by the laws of the state. This document does not take away any power of medical professionals but allows your advocate to participate in the decision-making process. HIPAA Release: This document allows your health care providers to release your medical records to individuals of your choosing, usually your patient advocate. In the event of your incapacity, this will allow your advocate to obtain any necessary documentation to assist in participating in your care.

HIPAA Release

This document allows your health care providers to release your medical records to individuals of your choosing, usually your patient advocate. In the event of your incapacity, this will allow your advocate to obtain any necessary documentation to assist in participating in your care.

Estate planning can be a daunting task. Unfortunately, failing to plan creates an even more complicated and expensive situation for those we leave behind. That is why the attorneys at Gudeman & Associates work hard to ensure your family’s future is fully protected when the unexpected happens. Call us today to schedule a free 30-minute consultation. During your appointment, we will cover the different documents and provisions available to build your estate plan based on your family’s needs and dynamics.