Douglas A. Turner, P.C.

What to Expect From an Estate Plan

An estate plan is more than a will or a living trust. It is a combination of many documents. Many people are surprised to learn just how many documents are involved. Here is what you should expect to receive in any estate plan:

What to Expect from a Will-Based Plan

If your plan is a Will-based plan, you should receive a Last Will & Testament, a personal property memorandum, a durable medical power of attorney, an advanced medical directive and perhaps a general financial power of attorney. A Will-based plan may include the following documents:

1. The Last Will and Testament
   The Last Will & Testament is the document that gives your property to your heirs upon your death.
2. The Durable Medical Power of Attorney
   The durable medical power of attorney identifies the person who you want to make medical decisions for you when you are unable to make the decision yourself.
3. The Personal Property Memorandum
   The personal property memorandum is used to give away specific items of personal property to specific heirs.
4. The Advanced Medical Directive
   The advanced medical directive, commonly known as a “living” will, is the document that directs the doctors to remove you from life support when your condition is terminal with no hope for recovery.
5. The General Financial Power of Attorney
   A general financial power of attorney identifies a person that has the ability to make financial decisions for you. Unlike the medical power of attorney, the financial power of attorney is a live document - the power holder has the ability to make financial decisions for you as soon as you sign the document. A general financial power of attorney is a powerful and potentially dangerous document.

What to Expect from a Living Trust Plan

If your plan is a living trust plan, you should receive all the documents that are in a Will-based plan and many more. However, the Last Will & Testament in a living trust plan directs that your assets be given to the trustee of your living trust instead of directly to your heirs. For this reason, it is commonly called a “Pour-over Will” because it pours assets into your trust.

A living trust plan includes the above documents plus a living trust, a bill of sale, a durable special power of attorney, a statement of authority for property held in trust and an attorney’s affidavit:

1. The Pour-over Will
   The “Pour-over Will” is your Last Will and Testament in a Trust-based plan, which directs how your assets will be given to the trustee of your living trust rather than directly to your heirs.
2. The Living Trust
   The living trust directs how your assets are to be used during your life and then who receives your assets at your death.
3. The Bill of Sale
   The bill of sale transfers your personal property into your trust.
4. The Durable Special Power of Attorney
   The durable special power of attorney identifies a person who can fund your living trust if you become incapacitated.
5. The Statement of Authority for Property
   A statement of authority for property held in trust is a document recorded in the real property records identifying the trustees of your living trust.
6. The Attorney’s Affidavit
   The attorney’s affidavit is a document executed by your attorney, under oath, identifying your living trust as your estate plan. The attorney’s affidavit typically contains the affidavit and a copy of your trust with the portion about who gets your assets upon your death removed.

What to Expect from Any Estate Plan

Whether your plan is a will based plan or a living trust plan, the following documents should be part of most plans. You should receive: an engagement letter from your lawyer, a joint representation letter if you are married, a tax letter and an exit letter:

1. An Engagement Letter from Your Lawyer
   The engagement letter is the contract between you and your lawyer. It should identify the flat fee (if any) and the hourly rates for the law firm.
2. A Joint Representation Letter for Spouses
   The joint representation letter is a disclosure letter. It discloses that as husband and wife, you are potentially adverse parties and that if your relationship deteriorates, your lawyer may have to withdraw form representing either party. The joint representation letter may also disclose that anything you tell your lawyer may have to be disclosed to your spouse.
3. The Tax Letter
   The tax letter is for your CPA. Typically, every estate plan has some portion of the fee allocated to giving tax advice. Typically, the money you pay for tax advice is deductible on your income tax return. The tax letter identifies that portion of the fee. A tax letter can be worth several hundred dollars in savings. However, your CPA should ultimately make the decision on the deductibility of the services.
4. The Exit Letter
   Last but not least, you should receive an exit letter or some document that instructs you about funding your plan. Perhaps the most overlooked (and most difficult) portion of any estate plan is the funding of the plan. An exit letter should tell you whom to designate as beneficiary of life insurance, retirement accounts and other assets. It should address estate tax planning issues, asset titling issues and any specific issues in your plan.

An estate plan is more than just a Will or living trust. It is a combination of documents that, when properly drafted, saves time and money upon your disability or death.