What Documents Are Essential For an Estate Plan?

What Documents Comprise A Complete Estate Plan?

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Estate Planning And Associated Documents.

In most estate plans, there are five essential documents involved. Three documents deal with death-related issues: the Revocable Living Trust, The Last Will and Testament, and The Certificate of Trust. The other two documents deal with incapacity-related topics: the Durable Power of Attorney for Financial Management and the Advance Health Care Directive. The basic descriptions of these documents are as follows:

What Documents Comprise A Complete Estate Plan?

Revocable Living Trust:

A Revocable Living Trust (also known as a family trust or intervivos trust) is a legal entity that you create, supervise and control which holds all of your assets (with some limited exceptions). The trust contains provisions similar to a will, thereby distributing your assets to the persons you want to receive them. It also names a Successor Trustee to take over for you (and your spouse) in the event of your death or incapacity. A living trust is a separate legal entity created by you to maintain control of your assets during your lifetime and death. Other examples of legal entities are corporations, limited liability companies, and partnerships. What makes a living trust unique is the ability of the trust’s creator to maintain control over the management and distribution of the assets in the trust during their entire lifetimes and for many years after their death. It is challenging to get a court to modify the living trust terms after death, and it rarely happens, absent some unique set of circumstances.

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Last Will and Testament (Pour-Over Will):

A Last Will and Testament (Pour-Over Will) provides for all assets not in the trust at the time of death to be transferred to the trust. It also nominates guardians for your minor children.

Certificate of Trust:

A Certificate of Trust is a short document that lists the relevant but non-private information about your trust. Instead of giving them a complete copy of your trust, you can often provide this document to banks, investment companies, and other custodians.

Durable Power of Attorney for Financial Management:

A Durable Power of Attorney for Financial Management grants powers to another person designated by you to manage your affairs in the event of your incapacity. In most cases, it will eliminate the need for a court-imposed conservatorship.

Advance Health Care Directive:

An Advance Health Care Directive grants permission to another person designated by you to make health care decisions on your behalf in the event of your incapacity. It also allows you to make life-support decisions for yourself and choose whether you wish to donate organs. In most cases, it eliminates the need for a court-imposed conservatorship.