Every estate plan should include six critical documents. If one piece is missing, your loved ones could be stuck with unnecessary legal proceedings and powerless to act in an emergency. However, if you have these six documents up-to-date, then you will be prepared for whatever the future may bring.
We would be happy to guide you through the estate planning process. Call us today or contact us online to schedule an appointment.
~ Wendy Guthro, Attorney & Counsellor at Law
“My philosophy for staying young is to act bubbly every day, drink bubbly every birthday!”
~ Betty White
What Are the Six Essential Documents for a Thorough Estate Plan?
1) A Trust is the Cornerstone Document of a Thorough Estate Plan
A trust is a type of virtual container to hold property. The type of trust you use will depend on the goal you want to accomplish. If you want to avoid having your property tied up in probate after you pass, your estate planning attorney will set up a revocable living trust. If you are creating a trust to conserve property while establishing Medicaid eligibility or reducing estate taxes, then you may need to establish an irrevocable trust.
Because you grant property to the trust, you will be considered the grantor. During your lifetime, you can also be the beneficiary of the trust, which means you receive the benefits of the property in the trust. Then it can pass to an alternate beneficiary after your death. Trusts are managed by trustees, who control how property is invested and disbursed. You can serve as your own trustee in many situations.
If you transfer your property into a trust, then it does not become part of your probate estate when you pass away. That property can pass directly to alternate beneficiaries without going through the delays and expense of probate.
2) A Will Works Hand in Hand with a Trust
Many people mistakenly believe that if they have set up a trust, they no longer need a will. However, it is wise to set up a “pour-over will” to cover assets that do not get transferred into the trust. A will can also be used to nominate a guardian for minor children, which is usually not accomplished within a trust document.
3) Durable Power of Attorney Protects Your Financial Stability if You Become Incapacitated
Do you know what would happen if you were unconscious due to an accident or illness? Would your bills go unpaid? Having a financial durable power of attorney in place can prevent this type of problem.
With a durable power of attorney, you grant someone you trust the ability to make decisions on your behalf if you become unable to make or communicate decisions on your own. Financial durable power of attorney could allow a family member or friend to pay bills or transfer funds to cover debts.
4) Medical Power of Attorney Provides for Healthcare Decision-Making
If you were incapacitated, would doctors be unable to provide treatment according to your wishes? A medical power of attorney, referred to in Massachusetts as a Health Care Proxy, authorizes a loved one to make decisions about treatment on your behalf. Once in place, discuss your health care preferences with your proxy.
5) Additional Healthcare Documents So Your Wishes Are Respected
The six essential estate planning documents include three healthcare documents. Besides the Health Care Proxy, you should have your estate planning attorney prepare an Advanced Directive/Living Will. This document allows you to specify the type of care you wish to receive if you are suffering from a terminal condition and unable to communicate your preferences.
6) HIPAA Authorization Enables Access to your Healthcare Information
The final health care document that should be part of your estate plan is a HIPAA Authorization. This document allows those named to confer with medical staff regarding your medical status and allows them to handle all medical-related health insurance and billing issues.
Our Team would be happy to prepare or review your critical estate planning documents so that you will be prepared for whatever lies ahead. Contact us to learn how we could help protect your future.
Funding a Trust means you transfer ownership of assets to the Trustee of the Trust. This month, we would like to provide tips on funding a Trust with your personal property, which are assets that are not individually titled. Such assets, including clothing, furniture, jewelry, and electronics, usually amount to the contents of your home. In order to avoid Probate of your personal property, you collectively transfer your personal property into your Trust.
This is performed by signing an Assignment of Personal Property. This general transfer document states that the property is now under the control of the Trustee of the Trust and will be distributed according to the Trust distribution terms.
Once your Trust contains all of your personal property, in addition to the Trust distribution terms, you may now use a Memorandum of Distribution for added flexibility. For Massachusetts estate plans drafted after 2012, the law allows for a Trust to contain language to distribute specific items of personal property to a named beneficiary via a Memorandum of Distribution. (Revocable Trust created at our firm after 2012 contains this language.) This transfer document does not allow for the distribution of monetary gifts or real estate.
The Memorandum of Distribution can be completed after establishing the Trust and can be amended or revoked during the lifetime of the Trust maker. The document does not require the oversite of an attorney or notary to be valid. Once completed, the document needs to be signed and kept with the Trust.
Word of the Month
Mellifluous definition, adjective:
having a smooth rich flow
a rich, mellifluous voice that gets her a lot of work in radio and TV commercial
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Attorney and Counsellor at Law
Seventeen Treetop Court Burlington, Massachusetts 01803 United States
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