Estate Plan Check-Up 2: Is Your Estate Plan Complete?

By Deirdre R. Wheatley-Liss, LL.M, CELA and Crystal West Edwards, Esq., CELA, Porzio Bromberg & Newman, P.C.

Whether you are doing a check-up on an estate plan you already have or getting ready to create one for the first time, it’s helpful to keep in mind what any estate plan needs in order to be complete. There are three essential documents that you need.

1. Last Will and Testament. This is the document that says, should I get hit by a meteorite, this is who gets the items that are in my own name (not in joint name) and items that don’t have any beneficiary designation to them. Within the will, you may set up trusts for children or for your spouse or others (more about that later). You’ll do tax planning, maybe you’ll record a specific request – that someone receive an item of your personal property.

2. Power of Attorney. A power of attorney allows somebody to make financial decisions for you if you were hit by said meteorite and you don’t pass away but you’re incapacitated. You need to give somebody else the authority to make those decisions for you. That’s done through a general durable power of attorney. If you don’t have a power of attorney and should something happen to you, your survivors must go to court to get something called a guardianship so that somebody has the ability to manage your affairs. (More about this in part 5 of this blog post series – “Guardians and Guardianship.”)

3. Healthcare Power of Attorney. A healthcare power of attorney is a document in which you authorize a specific person to make medical decisions for you in the event that you cannot make those decisions for yourself. You give them access to your medical records, and you can express your wishes regarding what types of care you would or would not want to receive.

In addition to those three foundational documents, some estate plans might include other documents such as a:
Revocable trust. A revocable trust is a will substitute. It says that instead of all your wishes being in your will, some of them are going to be carried out through the trust. It’s a tool that we use to address particular needs and circumstances – for example, if you live in a jurisdiction other than New Jersey where probate is very expensive, or you own real estate in different jurisdictions, or you want privacy in your estate plan (a will is a public document). You still need a will though, even if you have a revocable trust.

Irrevocable Trust. This is usually a trust that’s created for a specific purpose. Maybe we’re doing gift tax planning or asset protection planning for an older adult – to be able to set aside some of their assets so they’re not subject to a forced spend down. There’s usually a particular reason that we would put together an irrevocable trust.

This post is for general informational purposes only. The information provided may or may not apply to you given the specifics of your situation. For a video presentation of this information, please visit Estate Plan Check-up. For more detailed information, please visit porzioplanning.com or contact us for a free 20 minute telephone consultation.