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An Estate Plan
People say they need a Will. But there is so much more involved in truly having an estate plan.
So what is an estate plan?
An estate plan can be divided into two parts: plans while you are alive and plans for when you pass.
Plans for when you are alive include powers of attorneys and other related documents.
Plans for when you pass include the Will but also must include plans for non-probate assets.
Not properly planning for non-probate transfers can cause the biggest problems at your death.
I classify the documents and other actions for your estate plan into two categories: time sensitive and at death.
The time sensitive category is generally made up of your powers of attorney. These documents are needed in crunch time.
The at death category consists of your Last Will and Testament and other documents/acts that will only be needed at your death.
~ Medical Power of Attorney- this document authorizes a person(s) to make medical decisions when you are unable to.
~ Statutory Power of Attorney- this document authorizes a person to "handle your business" if you are unable to. Examples include handling money, selling real property, making purchases, etc.
~HIPAA Release- this document allows multiple people (other than your medical agent) to access your medical records and talk to doctors.
~ Physician's Directive (often called Living Will)- this document supersedes your medical agent in situations when you are terminal or in an irreversible condition with no expectation of recovery. In this document you can elect to be kept alive with all available means (life support) or be kept comfortable but allow you to pass.
~ Account signatories- this allows certain individuals to use your financial accounts but not obtain any ownership interest.
~ Last Will and Testament- this document names an executor, to serve with or without bond as an independent or dependent capacity (see other articles), and gifts your probate estate to the designated persons/charities/etc.
~ Designated beneficiaries- certain acts can be taken to designate non-probate assets to certain beneficiaries. This includes pay on death, right of survivorship, or beneficiary designations for financial accounts, life insurances, and a variety of other assets.
~ Designation of guardian - this document allows you to designate that if a guardianship becomes necessary, who you desire the Court appoint to that role. More often this document is used to disqualify someone to serve as guardian. In many situations, if there are valid medical and statutory powers of attorney, a guardianship will not be necessary.
~ Designation of remains - this allows certain persons to collect your remains after your death- which may be important if you are widowed or unmarried. If you want to be cremated, all heirs must agree. This document allows you to designate that you will be cremated bypassing the needs for agreement of all heirs.
~ Designation of guardian of minors- this document allows parents of minor children to elect who will serve as guardian of their children in the event both pass.
~ Trusts - trusts can be a very tricky tool. There are some benefits to trusts, but many times the cons outweigh the pros. There are specific times when trusts are valuable, but careful consideration should be given and tax consequences evaluated prior to creating trusts.
~ Transfer on death deeds- "Lady Bird Deed", life estate deed, and other real estate transfers are available in some situations to pass assets at your death.