Estate Planning

Everyone has an estate plan — it’s either the one you create for yourself or the one the state provides for you. We’ll let you guess which one is better.

Here are some of the common documents that make up a basic estate plan:

Last will and testament

This document, which becomes active after you die, expresses your wishes for how to divide up your property and possessions and names the people you prefer to manage your financial affairs (the “executor”) and care for your children who are minors or have special needs (the “guardian”).

Financial power of attorney

Think of this document as a permission slip that gives the person you name (the “agent”) the ability to conduct financial transactions, sign documents and make other legal decisions as if they were you. In most states, you can choose if your agent has this permission immediately after you sign or only once you are incapacitated. This document terminates at your death.

Advance health care directive

This document empowers the person you name to make decisions about your medical treatment, symptom management and end-of-life care. Depending on your home state, this document may go by a variety of different names, including a health care power of attorney or proxy. The document usually includes or is paired with a living will, which are your written instructions for health care providers about the type of life-prolonging medical care you want to receive if you are unable to make decisions for yourself.

Trust

A trust is created by a contract or agreement and acts like a bucket of “stuff.” The trust agreement is the set of rules that the creator of the trust puts in place for the person who oversees the trust (the “trustee”). The rules include what powers the trustee has over the trust, as well as to whom and under what circumstances the trustee can give assets out of the trust.

After you create a trust, you can transfer your assets into the trust right away, before you die. There are many types of trusts that accomplish different goals. Unlike a will, a trust is active the day it is created, which means your successor trustee can also help you manage the stuff inside of your trust in case you are incapacitated.