Four essential documents for proper estate planning
Making decisions easier for the people you love
- Trust & Estate
An estate plan helps you make sure that your property and assets are managed and distributed to your heirs according to your wishes. “It also gives you a way to communicate your preferences for medical care when you are no longer capable of doing so,” says Liza Connelly, J.D., LL.M., Managing Director and Wealth Strategist at Boston Private. That’s why a basic estate plan today should include these four legal documents, says Connelly:
1. A Will
Your “Last Will and Testament” is a legally binding document that includes your instructions for the distribution of your property and other assets to your spouse, children, and other heirs or perhaps directly to your living or revocable trust after your death. If your children are minors (under age 18), it will also include the names of the guardians you chose for them.
In your will, you name a personal representative (formerly called an executor or executrix) who is responsible for settling your debts and paying your final expenses and taxes before distributing your assets according to your wishes.
But remember: Because your will is only effective after your death, it doesn’t help people make decisions about managing your assets or your medical needs if you become ill or disabled. You need to specify a Power of Attorney and a Health Care proxy in your estate plan to do this.
I know it sounds corny,” but it is really an act of love. Organizing your estate plan and getting the information together in one place really is the best thing you can do for your family.
2. A Durable Power of Attorney
A Durable Power of Attorney document gives permission to the person you name (your “attorney-in-fact”) to make financial decisions on your behalf if you are ill or disabled. You can give your attorney-in-fact broad or limited management powers. A traditional power of attorney terminates upon your disability or death. However, a durable power of attorney continues during incapacity and terminates upon your death.
3. Advanced Directives (Health Care Proxies and Living Wills) for medical care
While your estate plan plays a central role in taking care of financial matters, the provisions it makes for your health care are equally important. This may require the preparation of “Advanced Directives” such as Health Care Proxies, Living Wills, or Medical Orders for Life Sustaining Treatment (MOLST), which allow you to exert some control over medical decisions made on your behalf.
But which of these documents are legally binding can vary from state to state, cautions Connelly. That’s why it’s important to check with your estate planning attorney about the laws in your state to make sure you have the right documents in place.
Trusts are legal entities that can give you more privacy and control over the transfer of your assets. They also can protect your assets from the claims of creditors. The most common trust for estate planning is a revocable trust that can be changed throughout your (the grantor’s) lifetime but becomes irrevocable when you become incapacitated or at your death. For more on the role of trusts in estate planning, talk to your advisor or visit the Trust Services section on the Boston Private site.
Although preparing all of this paperwork is extremely important, “an estate plan isn’t just the documents,” Connelly reminds us. “It’s thinking about how things are going to work and how to make managing a disability or illness in the future easier. It’s organizing your assets during your lifetime so they are available to those who depend on you.”
“I know it sounds corny,” she says, “but it is really an act of love. Organizing your estate plan and getting the information together in one place really is the best thing you can do for your family.”
How Boston Private can help
Your Boston Private advisor is available as a resource to help you develop and implement the estate planning strategies that are consistent with your overall financial goals and appropriate for your personal and business needs. He or she is fully prepared to:
- Answer your questions about the estate planning process
- Refer you to an estate planning attorney to create or update your documents
- Make sure your assets are properly titled and account beneficiaries are up to date
- Manage your trust investments
Your advisor can also introduce you to one of Boston Private’s Wealth Strategists, who can help you create trust solutions that match your unique circumstances. Boston Private is also prepared to serve as a corporate trustee in situations where an objective third party is required. For more information on our estate planning services, contact your Boston Private advisor.
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The opinions expressed and information contained in this article are given in good faith, may be subject to change without notice, and are as of the date issued. The accuracy and completeness of this information is not guaranteed. Since each client’s situation is unique, please review your specific investment objectives, risk tolerance and liquidity needs with your advisor before a suitable investment strategy can be selected.
- Trust & Estate