Estate planning is an interesting area of the law in that there are a number of solutions that the general public sees as both extremely technical and overwhelming while at the same time simple and suited to a DIY plan. Part of this dual perception is that there are countless tools we use in estate planning to accomplish a variety of different outcomes and goals. Which estate planning document is most important? My best lawyer answer is that it depends.
Each estate planning document serves a very particular purpose. Combined you should have a comprehensive plan that addresses all of these issues. Let’s examine what makes up a comprehensive plan:
- Health Care Power of Attorney, Living Will and HIPAA Authorization. Your Health Care Power of Attorney allows you to name someone to make health care decisions if you are unable to do so yourself. The HIPAA authorization allows the person you name to get access to your health care information. The Living Will allows you to make decisions regarding end of life care and treatment.
- Financial Power of Attorney. This document allows someone to make financial decisions for you during your lifetime if you are unable to do so yourself.
- Last Will and Testament. A will allows you to direct the distribution of any assets that are solely titled in your name at your death. It also allows you to name an executor to handle settling the estate, and name a guardian for any minor children.
- Revocable Living Trust. A Revocable Living Trust allows you to re-title certain assets into a trust to serve as a will substitute as an easier, more private way to distribute your assets at death. It avoids probate and can provide for comprehensive and flexible distribution patterns.
Are any of these documents more important than the other? No. They are all necessary as each document serves a distinct purpose within your plan. There is no one size fits all planning approach, but there are some fundamental pieces to a comprehensive estate plan that work together to accomplish your planning goals. If you have any questions about setting up a comprehensive estate plan, please join us for a free estate planning workshop or contact us!