Basics of Estate Planning: A Checklist for More Than Just a Will


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Gretchen Caldwell

Author: Gretchen Caldwell

Basics of Estate Planning: A Checklist for More Than Just a Will | EP Wealth

Estate Planning is the term often used in financial circles for planning for what happens after we die or if we become incapacitated. There are two big problems with the term "estate planning". The first problem is most people don't consider themselves to have an estate and as such they don't think estate planning is for them. The truth is we all have affairs that must be dealt with when we die and estate planning simplifies that process for our family members.  The second problem is that most people only think of planning what happens if they die. We must also include planning for what we want to happen if we are incapacitated and can't make decisions for ourselves - think if you are in a car accident and end up in a coma.

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Now that you understand why estate planning matters let's walk through the 5 documents to consider when you are putting together your plan.

1. Living Will

Your living will outlines the type of care you want, or don't want, if you become incapacitated and can't speak for yourself. It can cover, amongst others, your resuscitation wishes, desired quality of life and end of life treatments. The Living Will name can be confusing. Although it includes “Will” in the title,  it actually has nothing to do with the Will that is used in the event of death. The Living Will is related to your healthcare wishes. (more information)

2. Health Care Power of Attorney

A Health Care Power of Attorney (also called a Medical Power of Attorney) lets someone you have named (your agent) make medical decisions on your behalf if you are incapacitated. Your agent cannot contradict your living will, but will fill in the blanks in case your living will does not cover something specific. Some states, including California, allow you to create an Advanced Health Care Directive that combines a living will and a Health Care Power of Attorney. (more information)

3. Durable Power of Attorney - Financial

This legal document gives someone (your agent) the power to act on your behalf financially if you become incapacitated.  Your agent will be able to conduct financial activities on your behalf including: paying your bills, managing your investments, handling insurance paperwork, and handling transactions at your bank. Without this document, your family will have to go to court to get permission to take care of your finances if you are unable. This can be costly and you may have important financial decisions that can’t be made while they are going through this process. A durable power of attorney can go into effect as soon as it is signed. Alternatively, it can be a "springing" document which goes into effect only when a doctor declares you are incapacitated. (more information)

4. Will

A will is the legal document that tells the state where you want your assets to go when you die. Your will will be submitted to probate court to retitle your assets to the correct person. (more information)

5. Revocable Living Trust

A Revocable Living Trust is a document whose main purpose is to help you transfer your assets (your home, investment accounts etc) to your heirs while possibly avoiding the costly and time-consuming process of going through Probate Court. Here is a great article that details why you may want to avoid probate court. A trust is a legal arrangement that includes: the person who creates the trust (grantor or trustor), the person who is given the authority and responsibility to administer the trust (trustee), and the person who will receive the property at a later date (beneficiary). In the case of a Living Trust the grantor and the trustee are usually the same person . When you create your living trust you will need to "fund the trust" with the assets you want to pass along to your beneficiary. This can be accomplish by listing them in your trust documents. (more information)

Finding an Estate Planning Attorney

An estate planning attorney can help you put together a plan that includes all of the documents discussed in this article, tailored to your specific situation. If they create a Revocable Living Trust they may also be able to help you retitle your home to your trust. While it’s never fun to think about becoming incapacitated or passing, planning and being prepared  is something that is always advisable. Find an accredited Estate Planning Attorney here or reach out to me if you would like recommendations in the Bay Area.

How to Choose a Financial Advisor | EP Wealth Advisors

Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. This is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions with the appropriate professionals. EP Wealth Advisors, LLC is in not in the business of providing legal advice or preparing legal documents. For this reason, we cannot guarantee that the information referenced will be suitable, appropriate, or relevant to your specific and unique situation. Furthermore, different states have distinct probate law requirements. Information provided is not intended to supersede professional legal advice. Always consult an attorney prior to implementing anything referenced here


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