Estate Planning

At its most basic level, estate planning is making preparations for when you’re no longer able to make decisions for yourself. It requires creating and signing a few legal documents; but more importantly, it requires thoughtful decisions so that the money and possessions you have earned and accumulated can be passed down to your family or whomever you choose.

The legal documents:

Financial power of attorney: Think of this document as a permission slip that gives the person you name (the “agent”) the ability to conduct financial transactions, sign documents, and make other legal decisions as if they were you. In most states, you can choose if your agent has this permission immediately after you sign or only once you are incapacitated. This document terminates at your death.

Advance health care directive: This document empowers the person you name to make decisions about your medical treatment, symptom management, and end-of-life care. Depending on your home state, this document may go by a variety of different names, including a health care power of attorney or proxy. The document usually includes or is paired with a living will, which are your written instructions for health care providers about the type of life-prolonging medical care you want to receive if you are unable to make decisions for yourself.

Last Will and testament: This document, which becomes active after you die, expresses your wishes for how to divide up your property and possessions and names the people you prefer to manage your financial affairs (the “executor”) and take care for your children who are minors or have special needs (the “guardian”). A revocable Trust can offer some advantages over a Will (more on Trusts vs. Wills here). However, you can only designate an executor or a guardian through a Will, not a Trust. For this reason, you still need a short Will (called a “pourover Will”), even if the centerpiece of your estate plan is a Trust.

Trust: A Trust is created by a contract or agreement and acts like a bucket of “stuff.” The Trust agreement is the set of rules that the creator of the Trust puts in place for the trustee who oversees the Trust. The rules include what powers the trustee has over the Trust, to whom and under what circumstances the trustee can give assets out of the Trust. After you create a Trust, you can transfer your assets into the Trust right away, before you die. There are many types of Trusts that accomplish different goals. If you create a Trust as the centerpiece of your estate plan instead of a Will (more on Trusts vs. Wills here), you will set up a type of Trust called a “revocable Trust” or “living Trust.” You will be the trustee of your revocable Trust in the beginning. You can also designate the person who will step in for you as trustee so that when you are unable to manage your own affairs eventually, that successor trustee can distribute your stuff according to your instructions. Unlike a Will, a Trust is active the day it is created, which means that your successor trustee can also help you manage the stuff inside of your Trust in case you are incapacitated.

If you’re wondering whether a lawyer is also needed, it depends.

Most people can set up & manage their own estate plan with online tools, like the ones we use, which are backed by extensive legal expertise.

The Signing Ceromony

Once the Estate Documents are drafted and printed they will need to be signed by two witnesses and a Notary

The primary reason for getting the documents notorized is for your protection. By getting the documents notarized, there is confirmation that you have willingly signed them and they can be legally executed because you followed the state's regulations.