Anatomy of an Estate Plan
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. 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 Will, a personal property memorandum, a medical power of attorney, an advanced medical directive, and perhaps a general financial power of attorney.
- Will
The Will is the document that gives your property to your beneficiaries upon your death. - Durable Medical Power of Attorney
The durable medical power of attorney identifies the person to make medical decisions for you when you are unable to make the decision yourself. - Personal Property Memorandum
The personal property memorandum is an informal document allowing you to give away specific items of personal property to specific people. You can update this document without going back to the lawyer. - Advanced Medical Directive/Living Will
The advanced medical directive instructs the doctors what to do when your condition is terminal with no hope for recovery. - General (Durable) Financial Power of Attorney
A general financial power of attorney identifies a person to make financial decisions for you. Unlike the medical power of attorney, the financial power of attorney is typically a live document. The power holder has the ability to make financial decisions for you as soon as you sign the document. For that reason, sometimes a general power of attorney is not recommended.
What to Expect from a Living Trust Plan (a/k/a Revocable Trust Plan)
If your plan is a living trust plan, you should receive all of the Will-based plan documents and a few more. However, the Will in a living trust plan directs that your assets be given to the trustee of your living trust instead of directly to your beneficiaries. For this reason, it is commonly called a “Pour-over Will” because it pours assets into your trust.
A living trust plan usually includes the above documents plus a living/revocable trust, a bill of sale, a power of attorney, and a statement of authority.
- Pour-over Will
The “Pour-over Will” is your Will in a Trust-based plan. The Will directs your assets be given to the trustee of your living trust rather than directly to your beneficiaries. - Living Trust/Revocable Trust
The living trust directs how your property is to be used during your life and then who receives your property at your death. - Bill of Sale
The bill of sale transfers your personal property into your trust. - Durable Special Power of Attorney or General Power of Attorney
The durable power of attorney identifies a person who can fund your living trust if you become incapacitated. - Statement of Authority
A statement of authority is a document identifying the trustees of your trust. It is typically recorded in the Colorado real property records when transferring Colorado real estate.
What to Expect from Any Estate Plan
Whether your plan is a Will-based plan or a living trust plan, the following documents are usually part of the plan. You should receive an engagement letter, a joint representation letter if you are married, a disposition of last remains document, a tax letter, and an exit letter:
- Initial Consultation and Estate Planning Questionnaire
Your attorney needs information about you, your personal situation, and your finances in order to make any initial meeting worthwhile. Meaningful initial consultations usually require a modest fee because there can be up to 2 hours of legal time involved in setting up the consultation, reviewing your information, and then having an actual meeting either in person or by video. - Engagement Letter
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. - Joint Representation Letter
The joint representation letter is a disclosure letter. It discloses that as spouses, you are potentially adverse parties and that if your relationship deteriorates, your lawyer may have to withdraw from representing either party. The joint representation letter may also disclose that anything you tell your lawyer may have to be disclosed to your spouse. - Disposition of Last Remains
The disposition of last remains document is also known as burial instructions. This document identifies your wishes about how your body is to be treated after your death, your wishes regarding memorial services, and who is in charge. - Exit/Estate Plan Summary/Trust Funding Letter
An estate plan summary letter instructs you about funding your trust plan or will-based plan. Perhaps the most overlooked (and most difficult) portion of any estate plan is funding the plan. Follow up with things like mutual funds, bank accounts, and beneficiary designations are addressed in this letter, usually straight forward, and can be accomplished by you. Other items can require attorney assistance like conveying real estate and entity interests to a trust.
Additions That We Typically Include
In addition to the above and when executed in our office, we usually review the executed documents one final time looking for missed signatures, missed initials, and confirm the proper notary acknowledgement. The estate plan is scanned to file, placed in a binder, and a digital copy included on a flash drive in the binder.
