What Documents are in an Estate Plan? Understanding how estate planning documents work is central to creating an estate plan for each individual’s unique situation. An estate planning attorney needs to know the details of your life, not because they’re nosy. It is because this is how they can create a plan tailored to protect you during your lifetime, plan for long-term care and distribute assets upon your death. A recent article, “Understanding estate planning documents” from Lake Country Record-Bee, explains in broad strokes what each estate plan needs to include.
The Will nominates an Executor to administer the decedent’s estate, including the distribution of specific gifts and other assets. In Connecticut, the Will must be witnessed by two people who have no interest in the outcome of your Will. At death, the distribution of assets only applies to those in the estate and not to those who receive property transferred under a trust, through a designation of death beneficiary form or a joint tenancy title.
A Revocable Trust controls and manages assets placed in the trust during life and after death. Assets held in a Revocable Trust are used to avoid Probate in Connecticut. They are also very useful should someone become incapacitated during life. Assets in a Revocable Trust prior to death do not go through probate.
You should always have a successor trustee for a trust, who takes office when the last initial trustee resigns, becomes incapacitated, or dies. How and when the transfer to the successor trustee takes place is included in the trust documents. Some trusts include a specific method to fill a trustee vacancy, if no nominated successor trustee accepts the role.
Revocable Trusts can be changed by the person who establishes the trust or Grantor. The incapacity or death of the Grantor makes a living trust an irrevocable trust.
Powers of attorney (POA) allows a person (the principal) to authorize another person (the agent) to act as a representative over some or all of the principal’s own legal and financial affairs. The POA does not have any power over a trust; the trustee is in charge of the trust. A POA can be effective on signing or effective upon incapacity of the principal. POA forms do not always reflect specific individual wishes, so it’s best to have one created by an estate planning attorney.
The Advance Health Care Directive (AHCD) delegates authority to an agent to make decisions and act on the principal’s needs in health care. The AHCD must be created and be in place before incapacity occurs. An incapacitated person cannot sign legal documents.
Reference: Lake County Record-Bee (Feb. 18, 2023) “Understanding estate planning documents”