WHAT DOCUMENTS ARE NEEDED IN YOUR ESTATE PLAN

When determining what estate planning documents are needed, you should first inventory your assets, and determine what you estate planning goals are.  Generally, the primary goal of estate planning is to create a plan which provides for the management and preservation of assets during one's lifetime, and for the disposition of assets upon death.

At a minimum, there are three essential estate planning documents. They are, a Last Will and Testament, a Durable Power of Attorney, and an Advance Directive, containing a medical power of attorney and living will provisions.  Depending upon an individual's goals and circumstances, an estate plan may also include execution of a Living Trust, also known as a Revocable Trust or Inter Vivos Trust, an Irrevocable Trust, as well as beneficiary and payable upon death designation documents, indicating who is to receive property upon the owner's death.

The first essential document to have is a Last Will and Testament, wherein you can state how, and to whom, you want your probate assets distributed.  If you do not have a Will, your assets will be distributed to certain individuals, or escheat to the state, in accordance with Maryland's Intestacy laws, rather than as you may have wanted your assets to be distributed. Distribution of your non-probate assets will be made in accordance to your directions, such as with life insurance policies or retirement accounts,  which generally pass by beneficiary designation. In a Will you can also name the person whom you wish to serve as your Personal Representative, and guardian of your children, and include tax savings trusts, and minors trust provisions.

A Durable Power of Attorney is also an important estate planning document to have in the event you become disabled or incompetent and are unable to manage your financial affairs during your lifetime.  If you are no longer competent to manage your financial affairs, and have not designated someone as your attorney-in-fact, someone, whom you may not have chosen, can file a petition with the court to be appointed as the guardian of your property.

Another important estate planning document is the Advance Directive, which contains a durable medical power of attorney, whereby you authorize someone to make health care decisions for you, in accordance with your wishes, when you are no longer able to make those decisions yourself.  An Advance Directive can also include "living will" provisions, whereby you give directions to your agent as to the provision of life-sustaining procedures under certain circumstances.

You should review your estate planning documents on a yearly basis to be certain that they continue to meet your objectives. Certain events may warrant earlier review and revision to your estate planning documents, such as the birth of a child or grandchild, death of a beneficiary, changes in the tax laws, your marital status or domicile. Failure to change your estate planning documents could result in more adverse results than if you had not created them at all.


Published in Generations newspaper in 2010.