Comprehensive Planning: The Documents That Make Up An Estate Plan

Comprehensive Planning: The Documents That Make Up An Estate Plan

Estate planning is the process that you undergo during life to arrange for any of life's many, often unpredictable, situations. Some people are surprised to discover that estate planning involves more than just a will, especially if you want to avoid the probate process. The following list of documents, comprehensively known as an estate plan, will ensure that your wishes, your assets, and your family are most adequately protected at the time of your death.

Revocable Living Trust
A revocable living trust is an agreement between the "Trustor" (the creator of the trust) and the "Trustee" (the manager of the trust) to hold the trust assets for the benefit of the named beneficiary or beneficiaries. In order to form the trust, the Trustor transfers property to the Trustee to hold in the name of the trust. In a revocable living trust, the Trustor(s) and initial Trustee(s) are generally the same person or people. The Revocable Living Trust is aptly named; it is revocable and amendable for the lives of the Trustors. This means that you can change your trust as circumstances in your life change.

Creating a trust will provide you with several important benefits, chief of which is avoiding the expensive probate process. This, and other compelling benefits, are detailed here: The Top 5 Reasons You Need a Trust.

Declaration of Trust
The Declaration of Trust confirms that you intended that all of your assets go into your trust. While the Declaration of Trust is not a substitute for titling assets in the name of your trust, it can be helpful in the case that you forget to do so. If the latter happens, the Declaration of Trust can potentially avoid the probate of those assets held out of trust.

Certification of Trust
The Certification is an abbreviated version of your trust. It states the trust's existence, the name of the trustors, the current acting trustees, and all other information that a third party may require in order to deal with accounts or assets held in or being transferred to trust. The Certification will not get into the dispositive provisions of the trust, which are (and should remain) confidential.

Assignment of Personal Property
The Assignment of Personal Property is a way to transfer your personal property-- those assets that typically don't have title (think things in your home)-- to your trust. This document can also transfer to the trust any digital assets and/or rights that you may have (i.e. social media accounts, email accounts, etc.).

Instructions for the Distribution of Personal Property
This document is typically what people think of when they think of a will. It is essentially a list of your specific items of personal property and the name of the person(s) to whom you wish to give that property. For example, you can write, "I give my grandmother's sapphire engagement ring to my daughter, Annie Mack." These items will be distributed accordingly, and not according to the terms of the trust. The document tends to look like a list, so it is easily changeable. Furthermore, it is optional and can be completed by you at any time.

Last Will and Testament
In a full estate plan that also encompasses a trust, a will is generally referred to as a "pour-over will." This means that any of your assets that have not previously been transferred to your trust will be added to your trust at the time of your death. Unfortunately, those assets may be subject to a probate administration in order for this to happen. This is another reminder why titling your assets in the name of the trust is so important. The Will will also name a guardian or guardians for any minor children.

Durable Power of Attorney for Asset Management
This document, sometimes known as a Durable Power of Attorney for Management of Property and Personal Affairs (or more commonly, a "general power of attorney"), is where you name an agent to deal with any non-trust assets in the case that you become incapacitated. This document is generally drafted broadly, and can give your named agent the powers to dispose of, sell, convey, and encumber your real and personal property. It can of course be drafted less broadly, at your request.

Advance Health Care Directive (Health Care Power of Attorney and Living Will)
Like the Durable Power of Attorney for Asset Management, the Advance Health Care Directive comes into play upon your incapacity. However, here, your named agent will have the power to make medical and health care decisions, using your living will as a guide. Your living will is the portion of the Directive where you specify any end of life decisions you would like to make (e.g., choice not to prolong life, etc.).

HIPAA Authorization & Waivers
The HIPAA Authorization and Waiver authorizes your doctors and other health care providers to share your confidential medical information with those individuals who you will name within the document.

Final Disposition Instructions
Also known as burial instructions, this document allows you to specify whether you would like to be buried or cremated, what you wish to happen to your remains, and detail any prior arrangements you have made regarding your funeral and interment.

At its core, estate planning aims to eliminate uncertainties. These comprehensive documents are drafted to anticipate during life those situations that may affect you and your loved ones during your incapacitation or at the time of your death.

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