Components of a Complete Estate Plan

This article will give you a look into the foundational and ancillary documents that are included in a comprehensive estate plan.  Although these documents may vary from practitioner to practitioner, an experienced Folsom estate planning attorney will generally include most or all of these documents in your plan.  

The Foundational Document – The Living Trust or the Will

For most of my clients, I have determined that a living trust is the best way to structure their estate.  For these clients, the foundational document of their estate plan is the living trust agreement itself, which is generally several dozen pages and includes quite a few components.  Among other items, the living trust will be signed and notarized by the creator of the trust and the trustees.  Additionally, it will spell out with great specificity the client’s wishes and will create contingency plans for various situations that may occur during the individual’s lifetime or after passing. 

For a minority of clients, a living trust is not preferable and for these clients we use a will as the foundational document.  This is generally for situations in which the client’s estate will not need to be probated and is not subject to estate tax, and therefore a living trust is not necessary.

Please note that even if a client has a living trust, it is still important that the client has a will in place in case some asset is left out of the trust or the trust is not funded properly.  This very rarely happens, but the will should still be included as a backup.  This type of will, known as a “pour-over will” accompanies the living trust.

Key Ancillary Document: The Power of Attorney

One of the most important documents that will accompany the foundational document is the power of attorney.  This document gives broad and important financial powers to your “agent”, or the individual receiving the power of attorney.  For husband and wife clients, we generally create immediate power of attorney for each other, since they are generally sharing finances already.  Thereafter, we also include “incapacity” provisions, which will spell out who would take over as power of attorney if something were to happen to the couple.  For individual clients, they generally give a trusted family member or friend the power of attorney only if they were to become unable to handle their own affairs.  Lastly, if clients have minor children, this document will also spell out who will be the guardian.

Healthcare Documents: the HIPAA Authorization and the Advance Directive 

As part of an estate plan, it is important to include documentation that protects a client’s wishes if something were to go wrong with their health.  The first document is the HIPAA Authorization.  HIPAA, or the Health Insurance Portability and Accountability Act, is an important federal law that controls the release of private medical information.  We set up a HIPAA Authorization for our clients so that health providers and hospitals are authorized to release client health information to named family members and friends.  The second document is the Advance Directive.  The Advance Directive is meant to explore different occurrences that could take place with your health and what your wishes would be if those occurrences were to take place.  

Other Documents Specific to Living Trusts 

When we set up a living trust for a client, we generally include other documentation to properly fund and structure the trust.  These documents include the Certification of Trust and the Assignment of Personal Property.  They are used to fund your assets into the trust and to certify the existence of the trust to third parties, such as a financial institution.   

Summary

An experienced Folsom estate planning attorney will generally include some or all of these documents in a comprehensive estate plan.  If properly structured, your estate plan will cover everything ranging from financial to health matters.  If you have any other questions, please feel free to call or send us a message.