Your Estate Plan is a collection of crucial documents which protect you not only in the future but in the present as well. Every well-drafted Estate Plan will consist, at a minimum, of a Last Will and Testament, Protective Documents (sometimes called “Advance Directives”) and possibly a Trust of some type. You may also require a Letter of Intent, a Letter of Capacity, a Declaration of Pre-Need Guardianship, a Lady Bird Deed, and other legal instruments.
Your Last Will and Testament is an expression of your final wishes and gives direction to a person, the Personal Representative (sometimes called the ‘Executor’) regarding the disposition of your material wealth after your death.
Advance Directives assist you while you are alive. Advance Directives include different types of Powers of Attorney. One, the Power of Attorney for Property allows a trusted significant other to act on your behalf if and when you cannot sign documents, manage money, or supervise real or personal property, either because you are temporarily incapacitated (for example, ill) or absent (on vacation). A second type of Power of Attorney is the Power of Attorney for Health Care which allows your trusted significant other to make medical and health care decisions for you when you are unable to do so because of a serious medical situation.
The Living Will is a specialized Protective Document. It directs your physician to forego any heroic measures to keep you alive artificially if you have no hope of recovery and are in a terminal state. It is similar to a DNR (a “Do Not Resuscitate” order) but only operates when you are in extremis.
Trusts come in many forms. They are complex documents giving highly specific instructions regarding the management of your assets both during and after your lifetime. Depending on your particular needs you may require several types of Trusts for different purposes. Common types of Trusts are the Revocable Living Trust (RLT) and the Special Needs Trust (SNT). Trusts can be of invaluable assistance for tax planning and for the transfer of property after your death with minimal or no need for an expensive and time-consuming Probate proceeding. A Lady Bird Deed allows you to pass your home to your heirs without complex procedures involving Title.
A Declaration of Pre-Need Guardianship appoints your trusted significant other to look after the person and property of yourself (or possibly a disabled or minor family member) if you become unable to advocate for yourself or your family member for any reason.
The Letter of Intent and Letter of Capacity are both important “non-legal” documents. A Letter of Intent leaves detailed directions regarding the care of your disabled family member. The Letter of Capacity is a second layer of assurance that your heirs will not engage in a “Will contest” after your death, by providing medical certainty of your mental status at the time you sign your Will.
Your Estate Plan should be reviewed by a legal professional at least once every three years to account for changes in your lifestyle. Estate Planning need not be costly, and is tax-deductible. As such it is a cost-effective way of assuring your future and the future of your loved ones.
Not every document described in this article is available in every State, and the requirements for creating them may vary from jurisdiction to jurisdiction. Please inquire for more information.