Estate planning can seem like a mysterious and complicated matter, but it can be broken down to its component parts. In this post, we will look at five essential documents that should be part of every estate plan.
Will or Trust
The facilitation of asset transfers is at the core of the estate planning process. You could use a will to state your final wishes, but it is not the best choice unless your situation is extremely simple and straightforward.
A living trust is the ideal alternative for a wide range of people, and you do not have to be extremely wealthy to use this type of trust. There is no loss of control of the assets, because you would act as the trustee while you are living.
You would name a successor trustee in the trust declaration, and your heirs would be the beneficiaries. After you are gone, the assets would be distributed to the beneficiaries in accordance with your wishes.
The distributions would not be subject to probate, which is a costly and time-consuming legal process that would be required if you use a will. If you have concerns about the money management capabilities of beneficiaries, you could include spendthrift protections.
Unfortunately, many seniors suffer from cognitive impairment at some point time. To account for this, you can name a disability trustee. It can be the same individual or entity that will act as the successor after your passing, but this is not required.
There are other types of trusts that satisfy different specific objectives. For example, people that are exposed to estate taxes use irrevocable trusts to gain tax efficiency. You can also use a trust to get assets out of your name to qualify for Medicaid to pay for long-term care.
These are a handful of examples, but there are other tools in the estate planning toolkit when it comes to asset transfers.
Living Will
Your estate plan should address end-of-life eventualities, and the possibility of life-support utilization is one of them. You can express your preferences with regard to the use of resuscitation, mechanical respiration, and other life-support methods in a living will.
The document can also be used to express your comfort care medication preferences, and you can add organ and tissue donation choices.
Durable Powers of Attorney
Two of our five documents will fall under this category. Medical scenarios that are not related to life support can present themselves when you are unable to communicate. You can use a durable power of attorney for health care to name an agent that would act on your behalf under these circumstances.
To account for financial decision-making, you can add a durable power of attorney for property. The agent would be responsible for property that was never conveyed into your living trust if you do in fact have a trust.
HIPAA Authorization
The Health Insurance Portability and Accountability Act (HIPAA) went into effect in 1996, and it protects patient privacy. Because of a provision contained within this measure, doctors are prohibited from releasing medical information to anyone other than the patient.
You can include a HIPAA authorization in your estate plan to give your health care representative the freedom to access all relevant information. If you choose to do so, you can grant the authorization to other people as well.
Attend an Upcoming Seminar!
We are conducting a series of seminars over the coming weeks, and you can come away with a great deal of important information if you join us. There is no charge to attend these sessions, but we ask that you register in advance so we can reserve your spot.
You can see the dates if you visit our seminar schedule page, and when you identify the one that works for you, follow the simple instructions to register.
Need Help Now?
If you are ready to take the final step and work with an attorney to put an estate plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.
- Take Precautions to Protect Your Legacy - September 12, 2023
- Regular Reviews and Updates of Your Estate Plan Are Essential - August 24, 2023
- Estate Planning Tips to Help You Protect Your Family - August 8, 2023