The best estate plan is one that contains essential documents that meet your individual needs. Developing the right documents for your estate plan is something you can do after consulting with your estate planning attorney and evaluating the choices available to you. Even though the documents you create will likely be the same types of documents that almost everyone creates, these documents need to be specifically tailored to your needs and purposes. Regardless of your goals and circumstances, your estate plan will likely contain some or all of the following key documents.
Incapacity Planning Documents
An incapacity plan is something you create in case you one day lose consciousness or otherwise lose your ability to make choices. Incapacity planning includes several key documents, such as advance medical directives. Through your directives you will delegate your medical decision-making authority to someone else, as well as leave clear instructions about the kinds of care and medical treatments you wish, or don’t wish, to receive after you are incapacitated.
Financial Planning Documents
Estate planning requires you to consider what will happen to you after you die. As part of this process you will probably create a financial power of attorney. Through this power of attorney you give your decision-making abilities to another person so that person can step in if you lose your ability to manage your own finances.
You’ll also have to create documents that identify specific beneficiaries if you own certain types of property. For example, if you have a life insurance policy that allows you to name a beneficiary, you will need to make sure you complete that document correctly. Unlike other property, assets that have beneficiary designations do not pass through the probate process. To ensure this type of property passes properly, you need to complete the beneficiary designation forms.
A revocable living trust is often one of the most important pieces of any contemporary estate plan. These trusts allow you to largely avoid the probate process even if you own property that would normally have to go through probate before new owners take possession after you die. A revocable living trust is only one of the many types of trusts available to you, but all of them require you to create a document in which you establish the trust and its purposes.
Relying on trusts as the main part of your estate plan is great, but you always need to have a will. Even if you only create a pour-over will that complements a revocable living trust, it’s an essential document to have in your estate planning portfolio.
An experienced and qualified estate planning lawyer can explain what you need to do to create each of these documents, and why they are important.