Life’s Most Important Estate Planning Documents

Life and deathEstate planning documents can be an essential part of life; without the proper planning i.e., a durable  power of attorney and a health care documents, life is definitely interrupted when you and those around you are desperately crying out for something that works!

Some folks would have included the Will in this list of important documents as NJ 101.5 did in a recent article entitled: “Here are the important estate planning documents you should have.”  This article refers to these estate planning documents as the “Big Three”: the will, a general durable power of attorney and a health care power of attorney.  As many of you already know, I am not a big fan of the will.  A Will is only effective when you die so it is not a document that is required during your lifetime.  For so many reasons, I believe the third document, in addition to powers of attorney for health and finances, should be a Revocable Living Trust.  The very reason it is called a ‘Living Trust’ is because this type of trust is effective the minute you sign it.  Trusts can effectively replace the need for a general durable power of attorney once your assets have been transferred to the trust (with some very important exceptions).  Why is that important? Because there are times when a durable power of attorney will not work.  A durable power of attorney is not used until it is needed and many institutions will refuse to accept them if 1) they are too old; 2) were drafted in another state; or, 3) because they want you to use their form. Therefore, a durable power of attorney may well be a document that must constantly be updated or, as I recommend to my clients, immediately placed on file with the financial institution for their approval in advance so that it can be used when the time comes.  The reason I still included a power of attorney as a ‘big three’ document is because, even with a trust, there are assets such as IRAs or 401Ks that require the use of a Power of Attorney to direct these assets were you to become incapacitated during your lifetime.

Obviously, one of the many purposes of a trust and the primary purpose of a will is to declare who you want your assets to go to once you've died.  The added advantages of the trust are that it allows you to direct when and how those assets are to be distributed to possibly vulnerable beneficiaries and beneficiaries don't have to wait for the probate process to be completed before assets are available for their benefit.  And, because you have named successor Trustees of your trust, were you to become incapacitated, these Successors simply step up and assume your role as Trustee.

A general durable power of attorney is a document in which you designate a trusted individual, an Attorney-in-Fact, to act on your behalf on financial and property issues in the event you’re unable to do so. If the power of attorney is durable, its effectiveness continues after your incapacity. This will allow someone to act on your behalf if you become incapacitated in the future.

A health care power of attorney lets you designate an individual to act on your behalf for medical decisions if you are unable to make those yourself. A health care power of attorney is usually coupled with a living will. A living will stipulates your wishes on your continuing care under certain circumstances.

Appointing an Attorney-in-Fact with powers to act on your behalf on financial and property issues —along with the designation of a health care agent in a health care power of attorney—may eliminate the need for a time consuming and expensive conservatorship/guardianship proceeding if you become disabled or incapacitated down the road.

Finally, if your estate plan is a will you have the added obligation of needing to constantly update your beneficiary designations so that they remain current and reflect your wishes on the disposition of each asset. We assist our clients in the transfer of assets to their living trust so this review becomes part of our job.  However, with a trust, if you designation your trust as the beneficiary, you will never need to update beneficiaries even if your intentions were to change.  Instead, those changed intentions are documented in your trust. There is one additional benefit to naming your trust as beneficiary and that is the asset protection that can be provided to your beneficiaries.  This can be especially significant if that asset is a large IRA that would not enjoy asset protection if it were simply an ‘inherited IRA’.   This means that your living trust allows you enjoy a lot more control over assets with beneficiary designations. Your trust frees you from the requirement to add POD (payable on death) and TOD (transfer on death) accounts for any other assets you want to avoid probate; imagine the job of running around changing all these designations if plans change and change again.

There is no time like the present to get started on creating an estate plan that works.  We make it easy for you; you can request a complimentary consultation online or call us to schedule your consultation, whichever is easier. Ready? Go!

Reference: NJ 101.5 (September 13, 2016) “Here are the important estate planning documents you should have”


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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.