Basic Information for Any Estate Plan

The Mazza Law Group, P.C. would like you to take a moment and think about their estate plan. Now you may be thinking why do I need an estate plan? Well if you have children, a spouse, own a home or have a retirement fund you need to think about an estate plan. What is an estate plan? It is making decisions about things now for when you need them in the future whether that is when you are no longer here or if you become incapacitated.

Whether you’ve had estate documents done for many years or you’re just starting out, there are three documents that everyone should consider when developing their estate plan. The first is a Will. The Will is the document that says here is what I want done with all of my items when I am no longer here.

Within the Will, there are three fiduciary roles. The first is that of an Executor who is the party that gathers all of the decedent’s asset information and debt information; uses the assets to pay the debts and then distributes the balance according to the terms of the Will.

The second fiduciary role that may be included in a Will is that of a Guardian. A guardian’s role lasts as long as the child is a minor or in the case of a special needs child, for the length of time that a guardian is needed for that special needs child. The guardian is the person who is the caretaker for the child and handles day to day matters for that child.

The third fiduciary role is that of a Trustee. Trusts are created under Wills for various reasons. The most common being for minor children or special needs children and the trust lasts as long as indicated in the terms of the trust.

When deciding on who should fill these fiduciary roles, you want to select someone who can handle the responsibilities, is a good record keeper and in the case of the trustee and executor, also has some financial knowledge to handle those aspects of the role.

The second document to consider when developing your estate planning documents is a Power of Attorney. A Power of Attorney is the document that allows someone to step into your shoes as if they are you and manage your real property and other financial assets. This includes paying your bills if you are unable to do so. It also authorizes the agent to mortgage, sell, transfer and take any other actions that are necessary to assist you with your finances. An important thing to know about a Power of Attorney is that the agent that you have named must take action that is for your benefit and cannot take action that benefits themselves nor can they co-mingle funds of yours with theirs.

When naming an agent under a Power of Attorney, you want to select someone that you can trust and are comfortable with handling your finances as well as your real property assets. Powers of Attorney often come into play when an individual is deemed incompetent but Powers of Attorney can also be effective and used immediately to allow spouses to transact business for each other if one spouse is unavailable.

The third document that all individuals should consider when developing their estate planning documents is a Health Care Power of Attorney/Living Will. The Health Care Power of Attorney is a document that states as long as you can make your health care decisions for yourself, you will make them. If there comes a point when you cannot, your agent will make those decisions based on the instructions that you have provided.

The Living Will portion of the document is for the end of life decision making. That document generally states that if you are in a terminal condition with no realistic hope of recovery and it is only going to prolong the process of your dying, that you do not want heroic measures taken. If, however, you do want those heroic measures taken, that needs to be placed in the instruction of the Living Will as well. You want to choose individuals to act as agents who are able to make these decisions comfortably. The most important step in this process is for you to communicate your wishes to the healthcare agents that you have named.

In addition to the basic legal documents noted above, when developing an estate plan it is important to think about things that really aren’t necessarily legal documents but are things that your agents and family members will need at the time when you may be incompetent, incapacitated or pass away.

In our office we often call this list a Document Locator. A Document Locator is a written sheet of paper or a spreadsheet in the computer that provides your agents and your family with information that they may need, such as where is your safe deposit box, where are the keys to that box, where are your estate planning documents kept, where are your Deeds, where do you bank, what investment accounts do you have, where are they located and who can they contact about those assets. The same information applies to insurance policies, retirement plans, Social Security records, military records and discharge papers.

In addition to the list of documents and their whereabouts, I always recommend that individuals provide a list of professional advisors, such as your attorney, accountant, investment advisor, and provide information on neighbors that might be helpful to your family when they are trying to make decisions or find information.

Further, with the technology age, if there are bills that you regularly pay online as opposed to receiving an invoice and paying it, you will want to provide a list of those bills as well as any passwords for accounts that you have including your investment accounts, bank accounts and even social media accounts such as Facebook or Twitter so that those accounts can also be shut down when necessary.

Finally I recommend that clients write down their instructions for funeral services or memorial services. If that paperwork is readily available to your family it assists them at a time when they are struggling. If you are so inclined you can prepay and make those arrangements ahead of time.

The information provided is basic information that you should discuss with your advisors to determine what may be needed in your own estate planning. I recommend that you meet with your financial advisor, your accountant and your attorney and communicate with all of them your wishes and plans for the future so that all of your professional advisors can work together to provide the best plan for you. No two plans are the same and no two situations are alike. Therefore meeting with your advisors and planning ahead alleviates any stressful situations for your family and friends going forward.

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Basic Information for Any Estate Plan was last modified: September 21st, 2015 by Desiree Fralick