Overview of Basic Estate Planning Documents
What is a will?
A will is a legal document that specifies how you would like your assets to be distributed upon your death. The creator of a will can control how all personally held assets are disposed of (separate rules apply to the disposition of jointly owned assets).
A will is simpler to create compared to a trust, but does not offer the same level of control over assets after death (or during life) that a trust provides.
A will does not take effect until the creator has passed away. A will can be amended or revoked during the creator’s lifetime.
What is a trust?
A trust is a fiduciary arrangement that enables the creator to place their assets in the control of a third party for the benefit of a named beneficiary or beneficiaries. The creator can prescribe the terms of the trust and personalize it to their current needs, if the trust is created for their own benefit, or for the projected needs of a designated beneficiary, such as a dependent.
A trust enables the creator to outline specific terms and conditions for how the trust assets will be distributed and provides for more control than a standard will. A trust enables the creator to avoid probate. A trust is private.
There are different types of trusts, each suitable to the particular circumstance or need of the individual creator: inter vivos (living trust), testamentary trust (in a will), irrevocable trust, and charitable trust.
What is a power of attorney?
A power of attorney gives a named person the legal authorization to act for another person. They might be given limited or broad legal authority to make decisions about property, finances, or medical care on behalf of another.
The power of attorney is frequently used in the event of illness or disability.
What is a healthcare directive?
A healthcare directive, also called a durable power of attorney for health care, legally designates a health care proxy - someone to make medical decisions for you at times when you are unable to do so.
Your health care proxy should be familiar with your values and wishes so that they are able to make treatment decisions on your behalf if necessary.
What is a HIPAA waiver?
A HIPAA waiver allows a designated person to receive healthcare information that might be useful to the designated person when making healthcare decisions.
The waiver does not authorize decision-making, but allows for the disclosure of sensitive healthcare information.
What estate planning documents are right for you?
Which documents comprise your estate plan depends on your individual needs and circumstances. When considering putting together an estate plan, we take into account the following:
Are you a parent?
Do you have dependents?
Are you a property owner?
Do you have significant financial assets?
Do you or your dependents have long-term medical needs or special needs?
Are your dependents financially responsible?
Do you wish to protect your assets from creditors, lawsuits, divorce, bankruptcy, etc.?