Tuesday, March 10, 2009

What Are The Basic Estate Planning Documents?

Let's start with the basics. What are the basic estate planning documents?

Basic Estate Planning Documents
Will. This Will is commonly referred to as a "Pour Over Will." The Will governs the property held in your name at your death. The Will provides for the administration of that property, and directs that the property remaining after the payment of your debts, expenses of administration, and estate taxes imposed on such property be added to your Revocable Trust.

Revocable Living Trust. The Trust Agreement creates what is typically referred to as a "Living Trust." The Trust Agreement is entirely revocable and amendable by you during your lifetime. The Trust Agreement becomes irrevocable and not subject to amendment upon the death of the first spouse to die.

Any property that you transfer to the Trust during your lifetime will avoid probate upon your death. Property that you do not transfer to the Trust will be subject to probate, but will pass to the Trust through the probate process.

The Trust Agreement contains the provisions governing the disposition of your property upon your deaths. The Trust Agreement provides for gifts, creates trusts, names successor trustees, and sets forth your instructions to the trustees. Your important estate tax planning is also accomplished through the provisions of the Trust Agreement.

You are the initial trustee of the Trust. Upon your incapacity or death, the person you have named to act as successor trustee will serve. You reserve the right to remove and appoint trustees during your lifetime and to designate who will serve as trustees in the future.

Durable Powers of Attorney for Assets. The Durable Powers of Attorney for Assets name the individuals that you desire to serve as your attorneys-in-fact, sometimes called your "agents," to deal with matters affecting your property. Your agents are given the power to transfer property to your Revocable Trust. Your agents are also given the power to act on your behalf, as if you were present and acting, with respect to your property, all as set forth in the Durable Powers of Attorney. Being a "durable" power means that the agents are authorized to continue to act during any periods of time when you are incapacitated.

Advance Health Care Directives. The Advance Health Care Directives identifies the individuals that you desire to act for you if you become unable to make medical decisions for yourselves. The most common decision involves when, and under what circumstances, extraordinary measures should be used to prolong life. There are also sections of the Advanced Health Care Directive which deal with whether or not you desire to be an organ donor.

Nomination of Guardians. If a couple has minor children we also prepare a Nomination of Guardians to serve if both parents are deceased. A court proceeding in the Family Law court is required to formally approve a guardian and the court affords the written nomination of the parents great weight in making its decision.

Conclusion: These are simply basic definitions to help you understand the key planning documents in an estate plan. We recommend using an experienced estate planning attorney who specializes in this area since although the definitions of the documents can be basic, their drafting, planning and implementation can be quite complicated and require sophisticated legal expertise. If you are in Southern California, feel free to email or contact us directly to see if we can assist you with your estate plan.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210.
Henry (Hank) Moravec is a partner at Moravec, Varga and Mooney. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. The firm website is http://www.moravecslaw.com/