An estate plan is a set of documents that individuals create to determine how their accumulated property will be distributed once they pass away, to ensure that proper instructions for care and assistance are provided for periods of incapacity or at the end of the person’s lifetime, and to guide funeral or disposition of remains decisions. These documents can be either simple or complex, because they are individually crafted to suit the needs of the individual who is developing an estate plan.
The basic documents that are included in an estate plan are: a will or a trust, a medical power of attorney, a financial power of attorney, and a living will. Other documents may be developed as the specific needs of the individual requires.
A Will is a document that describes the person or people to whom the property held in an estate will devolve upon the planner’s passing. This document can either describe specific bequests to specific individuals, or general bequest to groups of individuals.
A Trust document can be tailored to meet the needs of the estate planner. Unlike a will, a trust gives the planner broad latitude to enact suspensive conditions, create requirements upon the beneficiary, and establish specific rules for administering, investing, transferring, and disposing of property. A trust is also an ideal tool for tax planning for high net worth individuals.
A Medical Contingent Power of Attorney is a document that determines the person or people who can step into the role of a person who is unable to make medical decisions for their own care during a period of incapacitation. The Medical Power of Attorney removes a roadblock between the patient and doctors, who must otherwise simply abide by the ethical rules of medical care, or allow next of kin to make the decisions on behalf of the patient without regard for whom the patient would have entrusted these responsibilities.
A Financial Contingent Power of Attorney is a document that determines who can step into the role of a person who has become incapacitated or is otherwise unable to manage their financial affairs. The financial power of attorney document can help negate financial harm that might result from a period of incapacitation, in which the incapacitated person is unable to pay bills, manage their credit, or maintain proper investments. This document decreases the likelihood of financial harm resulting to anindividual or their heirs when an incapacitated person is able to resume managing their own affairs, or when they pass away.
A Living Will is an end of life document that assists medical professionals and family members with making the proper decisions during the final days of a person’s life in certain circumstances. Typically, this document provides for the types of medical treatment the patient wishes to either receive or have withheld in the event that they are in a permanent vegetative state with no chance of recovery. This can help a person rest assured they will not be subject to a prolonged dying process without any consideration of their wishes.