18 Dec 2011

What is an Estate Plan?

Estate plans are more than just wills or trusts. Estate plans also include powers of attorney for financial and healthcare matters, plus temporary guardianships for kids.

An estate plan should be an ever evolving process. Estate planning needs will change depending on the type of assets you have and the different stages your family goes through. This is why our office invites anyone who previously did a will with us to come back at least once a year for a free estate planning checkup.

Call us now to make an in-office appointment to discuss your estate plan with an attorney.

What should be in an estate plan?

Everyone’s estate plan should be different. There are some general guidelines, however.

1. A Will

Your estate plan begins with a will. A will outlines your wishes in case you die. It is the basic building block of any estate plan. This will can be simple, or it can be complex. What matters is that you at least have a will. (You should have one even if everything is held in a trust.)

2. Advanced Directive for Healthcare

This is may also be known as a durable power of attorney for healthcare or living will. This outlines your wishes in case you become incapacitated or incompetent. In other words, if you are unable to make a decision on a medical procedure, this document outlines your general healthcare wishes. It also appoints someone who can make decisions for you. (Or fight  to ensure your wishes are kept.)

This document is simple and can be obtained free of charge from a number of different places. (For example, your local hospital likely has one.) We provide one free of charge and explain it to you before you fill it out. We also discuss ways you can increase the likelihood it is followed and how it can be used.

3. Power of Attorney for Financial Matters

This gives another person the right to manage your finances. There is no standard form for a power of attorney for financial matters, and each one should be tailored to the different circumstances facing each individual. You can limit the scope of the powers you grant. You can limit what financial assets the power of attorney covers. You can put conditions on when it goes into effect and when its effect ceases.

Generally, you want this document to allow someone you trust to take care of your finances if you become incapacitated or incompetent. For example, if you’re in an accident and become unconscious, then you will need someone to be able to make sure your bills are paid and your belongings are kept safe. Similarly, if you develop a mental incapacity—such as Alzheimer’s or dementia from a stroke—then you need someone who can look after your financial affairs.

We generally create what are called “springing powers of attorney” that only go into effect when certain conditions are met. Further, we work with our clients to ensure the scope of power is well defined, and the assets affected are clearly stated. Finally, we work with our clients to discuss strategies to ensure their wishes are enforced if the power of attorney goes into effect.

4. Temporary Guardianships for Minor Children

Anyone with children should have a temporary guardianship in place. These can spring into effect in a number of situations. If your spouse is out of town and you are in an accident, a temporary guardianship may be the difference between Child Services or your immediate family getting custody of your children until your spouse can return.

These documents are serious, and it requires a temporary guardian who is up for the task. It should also be someone local, not an out of town relative. The idea is that this temporary guardian will be there until the full-time guardian can be appointed. A temporary guardian can be the same as the person you wish to be full guardian, however.

We work with our clients to determine who will work best as a temporary guardian. We also explain to our clients ways to ensure the temporary guardianship can be effectively implemented.

5. Trusts

Trusts are not for every estate plan. Trusts can be expensive to create and maintain, but they can save a lot of money by avoiding probate entirely. Trusts also keep the details of an estate’s asset distribution private, whereas probate is a public process. Trusts, however, can be expensive to create and maintain.

Trust can be created during your life (and intervivos trust) or through your will (a testamentary trust). We work with our clients to ensure they have the trusts they need. For example, people with children should have a minor child contingent trust in their will. This is a testamentary trust that goes into effect if the person is survived by a minor child.

 6. Estate Instruction Sheet

Each estate plan should include an instruction sheet that provides guidance for folks who take on a duty through a will, trust, advanced directive, or power of attorney. This instruction sheet should include information on where documents are kept (such as wills, trusts, powers of attorney, et cetera). It should also include a list of assets and accounts. Account information is especially important given how much of our lives are handled through computers nowadays. This instruction sheet should include instructions on how to access not just financial accounts, but also email, social network, and computer accounts.

We work with our clients to develop a comprehensive list of these assets. Our annual estate planning checkup includes a review of this instruction sheet to make sure no changes need to be made. We also work with clients to determine how best to distribute this information—be it in a single document or multiple, and whether it is kept online or in a safe deposit box (or both).

How do I get an estate plan?

Call us now to book an in-office appointment online right now. We will go over the estate planning process and evaluate what estate planning products we provide best fit your needs.