Estate Planning: Frequently Asked Question
All the information you need to understand an Estate Plan
What is an Estate Plan?An Estate Plan is a collection of documents that lays out who should be responsible for the management of your affairs during a time of disability and following your ultimate demise.
An Estate Plan usually includes a Will, Durable Power of Attorney and Healthcare Power of Attorney with Advanced Directive. It outlines how you would like for your money and property and other assets to be distributed, it can make provisions for whom should speak for you in the form of a power of attorney, and it will alert your family what to do in the event of an end-stage illness with a healthcare directive and living will.
What is a Will?A Will is a document that will direct what happens with your real property, monetary assets and other possessions following your passing. By specifically outlining who gets what, a Will obviates the need for conflict within families, and also provides a measure of security for the drafter, called a Testator, who knows that their final wishes will be followed.
Important Tip: To be properly executed, a Will must be signed, dated, and either notarized, witnessed and signed by two people, or both
What is a Power of Attorney?A power of attorney document is most commonly found in one of two forms: (1) Durable Power of Attorney and (2) Healthcare Power of Attorney and Advanced Directive.
A Durable Power of Attorney is what one would call a *business* Power of Attorney. The person granting the power is the Principal, and the person receiving is an Agent. A Durable POA allows an Agent to have broad powers to speak and act on behalf of a Principal with little to no oversight.
A Healthcare Power of Attorney and Advanced Directive is a document that provides direction for healthcare providers about who they are authorized to speak to about your health, medications, and medical procedures. A Healthcare Power of Attorney is only applicable when the Principal is unable to speak for him/herself, on either a temporary or permanent basis.
An Advanced Directive is what is commonly referred to as a *Living Will.* It is a document that outlines your wishes in the event there you have an end-stage illness and is used to guide your Agent in making final decisions.
What is a Trust?Trust is a powerful tool for asset protection. When utilized correctly it can be structured to provide financial security to the Grantor and integral support to the beneficiaries.
Are there any other components to an Estate Plan?A comprehensive Estate Plan includes, but is not limited to: Life Insurance, Trusts, Guardianship and even Prenuptial Agreements. Using these tools will help you to shield your assets during your lifetime, minimize inheritance and estate tax liability, provide specific parameters and protections for beneficiaries, and any other purpose that your situation demands.