The Basic Estate Plan

Just about everyone needs a basic estate plan. The benefits of drafting a basic estate plan include naming people you trust to carry out important roles (Executor, Guardian, Trustee), deciding who you would like to receive your assets, avoiding/limiting probate, and providing clarity to your family as to your wishes.

The basic estate plan generally consists of 3 documents: the will, a power of attorney, and a health care power of attorney (living will).

Wills – The will is the bedrock estate planning document. In the will, you appoint people to important roles, name your beneficiaries, make gifts, impose or waive procedural safeguards, and can even create a trust. The trust, known as a testamentary trust since it is created by the last will and testament, is only created after the will is probated. A common testamentary trust is a children’s trust, which creates a trust for the benefit of your children up until they reach a certain age

Power of Attorney (PoA): The power of attorney grants an agent you designate the authority to make financial decisions or your behalf. There are 2 basic ways to draft a power of attorney: general or springing. A general power of attorney gives your agent immediate access to your finances. The benefit is that it is easier to administer, but the risk of misappropriation is higher. A springing power of attorney only becomes effective if a doctor determines you cannot make decisions or yourself. The benefit is that it protects against misappropriation, but is more difficult to administer.

Health Care PoA (Living Will): The health care power of attorney, sometimes referred to as the living will, grants an agent you designate the authority to make health care decisions should a doctor determine you are unable to make decisions for yourself. There are 2 basic ways to drafting the health care power of attorney: nomination or list. The nomination method involves naming an agent, having a conversation with that person about your health care wishes, and trusting that person to honor your wishes. The list method allows you to list specific medical procedures you authorize or prohibit in accordance with your personal beliefs.

While estate planning may seem complicated, just about everyone needs a basic estate plan. At the Law Office of Kiran Mahal, we specialize in estate planning and can help you understand and plan your estate to ensure your needs, and the needs of your family, are met.