What Documents Are In An Estate Plan?

What Documents Are In An Estate Plan?

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There are some documents that are usually the core documents in an estate plan. An estate plan can get as varied and as complicated as the estate and the owner of the estate happens to be.

The basics in an estate plan usually start out with some form of a Trust. It doesn’t have to have a Trust, but in many cases a Trust is highly recommended. The Trust could be a Revocable Trust, or it could be an Irrevocable Trust, and there are benefits and advantages to each. Sometimes estate plans have both, but quite often there is at least one Trust in the estate plan.

The other core document in an estate plan would include what’s known as a Pour-Over Will. A Pour-Over Will essentially pours everything over into the Trust so that the Trust is the governing instrument at the end of the day. The Pour-Over Will is only designed to handle the residual things that the person didn’t transfer into the Trust during their lifetime.

In addition, there is usually a Durable Power of attorney. A Power of Attorney allows someone that you designate, to manage your finances in the event of incapacity. Oftentimes we don’t activate the agent until there is incapacity. Durable means that it continues during the time of incapacity.

In addition to a power of attorney, there is a Health Care Proxy in a basic estate plan. A Health Care Proxy is a document in which you designate who you want to make medical decisions for you in the event that you are unable to make those decisions for yourself. If you are, G-d forbid, in a car accident and you are unable to make decisions, or it’s later in life and some form of dementia or other sickness has set in which makes you unable to meaningfully contribute to your medical decisions, then a Health Care Proxy defines who is going to be the person that the medical providers are going to look towards for decisions regarding your healthcare.

There is another document called a Living Will. I don’t think that’s a really good name because people confuse a Living Will with a Will, but the essential term “Living Will” applies to end of life decisions. We all know about the Terry Schiavo situation where she was on life support for many years while the family fought over whether she should be removed from life support systems. Oftentimes, when a person has reached their end of life stages, they are on some form of life support, whether it’s ventilation, intubation, a tube that’s inserted through the mouth into the stomach in order to feed them and keep them alive, or another type of medical or electronic measure to keep them alive. If you remove those medical or electronic measures, then they would no longer stay alive. This is where the Living Will comes in.

A Living Will essentially says that if I am at the end of my life, if I have no chance of a meaningful life, if I am in a vegetative state, and if the only thing that’s keeping me alive is equipment, then I authorize my Health Care Proxy to pull the plug or remove the equipment. That’s a decision that can’t be made by a regular Health Care Proxy without some sort of guardianship proceeding. If you don’t have a Health Care Proxy, it’s not going to be made without a guardianship proceeding (at least most hospitals are just not going to take any adult if they are related or their word).

A Health Care Proxy coupled with a Living Will is very important in order to make sure that you won’t be on life support for some long, indefinite period of time, and to make sure that someone who loves you won’t have to spend many thousands of dollars on going through the legal guardianship process in order to get permission to remove you from life support. Those documents make everything happen very smoothly. If you are younger, then you can tailor those documents, and I often do that for my clients. I tailor them so that they are not in such a rush. Some of my clients are much older and they say, “I know I am going to be going at some point in the not too distant future, so if that comes, that’s what I want you to do. Make it straightforward. If two doctors say that I’m finished, then that’s what I want. I want my Health Care Proxy to authorize them to take me off life support.”

For younger or healthier clients, I might tell them to not be too quick. A Living Will is a good document. It helps to prevent you from being on life support for some indefinite period of time, but what they want to do is put milestones in there so that they have to be followed. If there is any improvement after a 60-day evaluation, however so slight, then that kind of puts a halt on it and you do another 60-day evaluation to see if there is any more improvement. I’ve heard stories of people who are younger and they’ve come out of a coma about a year later when everyone thought they were brain dead and would be a vegetable for life. I’ve heard people tell me these stories, so I’m not so quick to recommend for young people that they quickly remove life support through a Living Will. However, the Living Will is an important document in the process.

There are a few other documents which are helpful along the way. There is what I call a Personal Property Memorandum. A Personal Property Memorandum will allow you to identify where you want your personal property to go and who you want it to go to without having to change your whole Trust or your Will. I refer to the Personal Property Memorandum in the Will or in the Trust and you basically fill it out at home. For example, you might want a diamond necklace to go to your daughter Susan, or a clock to go to Aunt Rosie. You have to sign it and date it and then your Trustee or your Executor is going to be required to follow the directions inside the Personal Property Memorandum. This allows you to make changes when you want. People used to only be able to make changes by redoing a Will and making a Codicil, which is a modification document to the Will. Those types of changes are time consuming and relatively expensive. A Personal Property Memorandum, on the other hand, has no cost and is a very effective document in a properly constructed Estate Plan.

There are a small handful of other documents which help facilitate things along the way. The basics of an Estate Plan really include one form or another of a Trust, a Will, a Power of Attorney, a Health Care Proxy, a Living Will, and the Personal Property Memorandum. It can then become a lot more elaborate. If people own a significant amount of real estate or a number of businesses, they can get into Family Limited Liability Companies and Structures, which protect businesses and real estate against many taxes and creditors and to offset capital gains. There are various other different Trusts, including charitable Trusts and Dynasty Trusts. Really and Retirement Trusts, etc. There are about 30 different specialized Trusts for people who have significant assets that can help them in one way or another to preserve their assets or save money somewhere along the way.

At my firm, we sit down with clients and take a look at their overall estate. We take a look at what assets they have, what income they have, what their goals and desires are, and what they want to accomplish in the future. We then craft a very specific estate plan that is tailored exactly to what that individual or that couple needs. We put that into writing and we find that people are very happy.

For more information on Documents in An Estate Plan in Long Island, Nassau County and Suffolk County, a FREE phone consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 806-0762 today.

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