As an estate planning attorney, I have dozens of tools I can utilize to assist my clients in their estate planning goals. These documents take all different forms and serve specific purposes. So the question becomes, which document is the most important?
Estate planning is all about the client’s goals. I have prepared incredibly complex documents for clients with modest estates due to complex family dynamics, disability, and other specific goals in mind. I have also prepared “simple” documents for clients with larger estates who do not need additional complexity and desired simple planning. I have spent hours with clients drafting language for the care of their animals, something another client may not find as important.
To me, the most important document in estate planning is the one that accomplishes the client’s goals. There are a number of documents however that create the foundation for a comprehensive estate plan.
- Last Will and Testament
- A will identifies who is the executor, who would be the guardian of any minor children, and how any solely titled assets are distributed upon death.
- Financial Power of Attorney
- A financial power of attorney identifies an agent who can handle any financial decision making during your lifetime. This document no longer works after the creator passes away.
- Health Care Power of attorney
- A health care power of attorney identifies an agent who can make health care decisions for you during your lifetime.
- Living Will/Advanced Directive
- A living will establishes end of life care decisions ahead of time to guide your health care power of attorney agent on the care you wish to receive.
- HIPAA Authorization
- A HIPAA Authorization allows you to name someone to talk to doctors and gain access to your medical information.
- Revocable Living Trust
- A revocable living trust is a tool to retitle assets during your lifetime where you retain complete control over the assets, designate a successor trustee to manage the assets during your lifetime if needed, and to distribute at your death. Also, it allows you to designate a beneficiary of those trust assets, which will pass to the beneficiary avoiding the probate process.
Each of these documents clearly serves a different purpose which can accomplish the specific goal you have in mind. There are other tools as well such as life estate deeds, irrevocable Medicaid trusts, and advanced estate tax planning tools. All of these come with advantages, disadvantages, and serve different purposes. There is no BEST tool, or MOST important tool, only the one that serves the client’s needs the best.
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