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I’m frequently asked, “What is an Estate Plan?”  A trust is a piece of an estate plan, but by itself is not the total estate plan.  To answer that question, here are the five elements that make up an estate plan. 

Durable Power of Attorney

Your Power of Attorney is designed to keep you out of conservatorship court.  By naming the person you choose to make important financial decisions on your behalf, you stay in control.  There are two kinds of Powers of Attorney – the Statutory Form, which is very short, and the long form which spells out in exacting detail the kinds of decisions your agent can make on your behalf. 

AHCD / HIPAA Release

The second set of documents designed to keep you out of conservatorship court is the Advance Health Care Directive – the old name for this document is the Durable Power of Attorney – Health Care.  This document lets you name the person to make medical decisions for you.  The HIPAA Release specifically allows your doctors and medical professionals to keep the people you choose informed. 

Will

For most plans, the will is simply a backup document in case a probate case needs to be opened.  But for parents of young children the will plays an important role: naming the guardians for your children should anything happen to you. 

Trust

A trust can do so much more than just avoid probate, and for that reason it’s the piece of the estate plan that typically gets the most attention.  Beyond avoiding probate, a trust can manage how your children receive their inheritance, guard that inheritance from lawsuits, creditors, and divorcing spouses, manage tax exposure and more. 

Funding Documents

Really a whole suite of documents and tools, funding your trust depends on the type of assets you have and where they’re located.  At a minimum, you should have an Assignment of Personal Property, a Trust Certificate, and real property trust transfer deeds.  You’ll want to make sure that everything that should go into your trust does, and the things that shouldn’t (that’s correct, not everything should go into your trust) do not.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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