What is in a well-designed estate plan?
A well designed estate plan wraps you in a blanket of protection and peace of mind.
A well-designed estate plan not only tells the world how you want your stuff distributed but protects your freedom of choice during your lifetime. It sets forth rules and put people in charge to protect you and your money during your lifetime and beyond.
The first, and most important piece of a plan, in my opinion, is the durable power of attorney. This protects you during your lifetime. It keeps your family out of court seeking permission to make decisions for you and to manage your property. And, it is much cheaper to setup a power of attorney than to go to court.
In a power of attorney, you name somebody you know and trust, not necessarily a family member, to manage your affairs and make decisions for you if you can’t. This person will be in charge of managing your money and other property if you can’t.
For healthcare, you set up a healthcare power of attorney. This is a power of attorney specifically to make healthcare decisions if you can’t.
To go along with a healthcare power of attorney you should also setup a HIPAA waiver or protected healthcare information release. This tells the medical professionals who they can talk to about how you are doing and what is wrong with you. Without this, the doctors and nurses are limited in what they can discuss and who they can discuss it with.
Finally, we get to the parts of a plan that deal with the distribution of your estate.
First, a last will and testament tells who gets what when. A will requires probate, but can work with some additional planning.
Second, a trust can be created. A trust avoids probate and provides for management of assets during your lifetime. You name a successor trustee to take over managing the property in the trust if you can’t during your lifetime. Afterwards, the final trustee will follow the instructions in the trust to distribute your property and money.