The 5 Estate Planning Documents Everyone Should Have

End of life decisions are some of the hardest and most emotional decisions you will ever make. As you take the time to consider your family, friends, and belongings, the process can be very overwhelming. The principal benefit of an estate plan is the preparation of a clear vision of your wishes that allows your family and friends to be at peace when you are.

Estate Planning Document Essentials

There are 5 essential estate planning documents that are typically included in an estate plan:

 1. Last Will and Testament

The key document for any estate plan is the Last Will and Testament. A Will is a legal document wherein the Testator or Testatrix (writer of the Will) expresses their wishes or instructions for how their property is to be distributed at death. This document can also contain instruction regarding guardianship for your children. In your Will, you name a Personal Representative (sometimes called an Executor) to carry out these wishes and to manage the estate until it is completed or fully distributed. While revocable during life, the document takes effect upon your passing and become irrevocable.  

2. Power of Attorney for Finances

 A Durable Power of Attorney for Finances is a legal document that names an Attorney-in-Fact to act on your behalf for financial matters. This useful instrument is critical in the event you become incapacitated or unable to handle your own financial affairs. Within this document, you have the ability to specify what your Attorney-in-Fact can or cannot do (e.g. create or amend trusts, make gifts of money or property, create/amend/revoke community property agreements, etc.).

3. Power of Attorney for Health Care

As suggested in its name, the Power of Attorney for Health Care names an Attorney-in-Fact to act on your behalf for medical or health care matters. This type of Power of Attorney enables your Attorney-in-Fact to make medical decisions on your behalf and can speak to guardianship.  The Power of Attorney alone does not necessarily recognize your specific medical wishes.  

4. Health Care Directive (Living Will)

The Health Care Directive (sometimes called a Living Will) specifies the medical treatments to which you do and do not consent in regard to life-sustaining treatment. It can be a separate document or built into the Power of Attorney for Health Care listed above, and speaks to specific care in the event you are in a “permanent unconscious state” or diagnosed with a terminal condition which prevents you from communicating.   

5. HIPAA Authorization

This simple document provides authorization to whomever you designate to speak to, and obtain information from, your doctors or medical professionals. It is an authorization required by the Privacy Rules of protected health information, including treatments and payments.

Estate Planning Document Options

Trusts

A legal entity that is used to hold and manage property for the benefit of one or more beneficiaries. Trusts are very flexible legal arrangements and can be customized in a variety of ways to meet your estate planning needs. This document should not replace a Will, but rather complement it by providing the ability to minimize estate tax liability, or provide for a spouse or child after one’s death.

Deeds

A deed is a legal instrument used to transfer property. There are specific situations where you may choose to sign a deed well in advance—to plan for Medicaid or to ensure a certain property goes to a specific person and transfers on death, for example.

Community Property Agreements

An agreement between partners (including state-registered domestic partners) to define their property as “community property.” Typically, when one spouse passes, the decedent’s property (both separate and community property) becomes community property, as well as a non-probate asset.

If you would like your estate planning documents reviewed to ensure they are in line with your retirement and tax goals, we are happy to offer a complimentary review.

Jenny Hubbard

Trusts and Estate Planning are governed by both state and federal law. These laws can change periodically, and you should always consult with an attorney for the most current advice and applicable laws to your personal situation. The information contained within is not intended as a replacement for legal advice, but rather to act as a guide for discussion.