An estate plan is a series of legal documents that gives you maximum control over decisions that affect you and the ones you love.
An estate plan generally consists of the following legal documents:
Revocable Living Trust
The term “living trust” is generally used to describe a trust (a) which you can create during your lifetime, and (b) which you can revoke or amend whenever you wish to do so. You can also create an “irrevocable” living trust, but that is permanent and unchangeable and is almost exclusively done to produce certain tax results beyond the scope of this summary. Like a Will, a living trust can provide for the distribution of property upon your death. Unlike a Will, a living trust avoids probate at death. It can also (a) provide you with a vehicle for managing your property during your life, and (b) authorize the trustee to manage the property and use it for your benefit (and your family) if you should become incapacitated, thereby avoiding the court from controlling your assets at incapacity or appointing a guardian for that purpose.
Last Will & Testament
A Last Will & Testament is a legal document in which you identify the beneficiaries (people and/or companies or charities) who will receive your property after your death. The Will names a person or company to manage your affairs and is responsible to see that your property is distributed as provided in Will. The Will may also name the guardian(s) of your minor children, the conservator(s) of property that belongs to minor children, make specific gifts of property and include burial instructions.
General Power of Attorney for Financial Matters
This is a document that grants one or more people the power to manage your financial affairs if you become unable to do so or if you want a person to handle these things for you. The holder(s) of your power of attorney have the legal power to make binding decisions that affect your money, property, and other assets, including, paying your bills and spending your money. Without a power of attorney, your family may be required to obtain a court-supervised conservator to manage your financial affairs. A power of attorney terminates on your death.
Advance Health Care Directive
An Advance Health Care Directive is a document in which you may declare who will make healthcare decisions (including mental health care decisions) for you if you are unable to make those decisions for yourself. This document will also state the conditions under which you do not want your life to be prolonged and do not want life-sustaining treatment, beyond comfort care, if that treatment would serve only to artificially delay the moment of your death. Your Advance Health Care Directive may also state that if you are in a terminal condition, you do not want cardiopulmonary resuscitation, drugs, electric shock, artificial breathing, artificially administered food and fluids, or to be taken to a hospital if at all avoidable.