There are 5 important documents in basic estate planning:

  1. Health care documents
    • Declaration – Who will make medical decisions when you are incapacitated?
    • Living will – Declaration stating whether you would like to be kept alive artificially if there is no reasonable probability of your recovery
  2. Durable power of attorney
    • For financial matters, there is an immediate power to deal with all financial assets in your name
    • It is effective immediately, but only meant to be used in incapacity
    • Being “durable” the power continues after your incapacity
  3. Pour over will
    • Appoints an executor or personal representative
    • This person files a final federal income tax return, estate tax return, and state income tax return
    • Also pours over all assets not titled to a trust to an existing trust
  4. Revocable living trust
    • Extension of yourself while you are alive
    • You title assets to the trust for ownership
    • Assets inside trust avoid probate upon death
    • Trust document stipulated who gets what, when, and in what proportions
    • Becomes irrevocable upon your death
    • Assets can be titled to trust to maximize avoidance of estate taxes
  5. HIPAA disclosure letter – Gives people listed ability to access and disclose your healthcare information

There are many idiosyncrasies and complexities with each estate plan and these five documents are only the base of most plans. There is far more advanced planning that can be done, incorporating these documents and beyond.