Estate Plan Essentials

April 20, 2018

A surprising number of people have not yet attended to their estate planning. Perhaps this is because estate planning has become so much more complicated in recent years, even though the burden of taxes at death has been in decline. Estate planning now usually covers medical and financial decisions before the end of life, as well as after death.

Here are the documents that will be drafted for many estate plans today.

Financial DocumentWhat it Does
WillIdentifies beneficiaries. May establish one or more trusts for ongoing asset management. Nominates the person or organization to be responsible for estate settlement.
Power of attorneyDelegates authority to an agent to make financial decisions. The agent's authority ends when the principal is incapacitated.
Durable power of attorneyDelegates financial decision power to an agent, even if the principal is incapacitated. In some cases, the power "springs" into being upon incapacity or other identified event.
Revocable living trustTransfers assets and full financial management authority to a trustee. The trust may continue into incapacity, even beyond the death of the trustor.
Medical DocumentWhat it Does
Power of attorney for health care (sometimes called a health care proxy)Identifies an individual to make medical decisions when one is unconscious or incapacitated.
Living willProvides guidelines for medical decisions when an individual becomes terminally ill, such as whether feeding tubes or ventilators should be used to prolong life.
Do not resuscitate order (DNR)Specifically requests that cardiopulmonary resuscitation not be used if one's heart or breathing stops.

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Legal, Investment and Tax Notice: This information is not intended to be and should not be treated as legal advice or tax advice. Readers should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel.