estate planning

What Are the 5 Most Important Estate Planning Documents?

The five most important documents to have in your estate plan are your will, a trust, powers of attorney, advanced medical directives, and beneficiary designations.

When combined into your overall estate plan, these documents can make it easier for your loved ones to manage your care and finances during incapacity and settle your estate when you pass away. Although it can be difficult for many to even think about making a plan for their estate, doing so as soon as possible is crucial to protecting yourself and your loved ones during difficult times.

Make a Will to Start Your Estate Plan

If you haven’t done any estate planning before, you might want to consider beginning with your will. Your will document provides the foundation of your estate plan, helping your estate and your loved ones avoid the difficulties of intestate succession.

Intestate succession occurs when someone with even a moderate amount of wealth dies without a will, trust, or any other document describing what should happen to their property. In lieu of your will, state law determines who your heirs are and how much of your property they may inherit. Because of this, and several hurdles your loved ones can encounter when dealing with intestate succession, it’s desirable to ensure you can avoid this outcome.

What Do I Put in My Will?

How you structure your will and the inheritances you intend to give is entirely up to your discretion. That said, there are some things you must make sure your will contains.

When creating a will, you must ensure the following:

  • Basic personal information about who you are
  • Legal language that clearly declares testamentary intent
  • The identity of your preferred executor
  • The identity of your preferred legal guardians for minor children and pets
  • A list describing your property and which beneficiaries should inherit it

Even if it’s a legal document, your will is a very personal testament. If there are things you wish the important people in your life to know after you pass away, you may include these sentiments as well.

Establish a Trust to Secure Your Wealth

A trust is a legal document you can use when you want your estate, and your loved ones, to avoid the probate process. No matter the type of trust you establish (and there are many unique kinds of trusts), it can avoid probate and help you pass on your wealth to the next generation of your family without unnecessary delay and expenses.

How Does a Trust Avoid Probate?

Trusts avoid probate by allowing you to title important assets (such as your home, bank accounts, investments, personal property, and more), to a trust managed by a third party. In doing so, the property is legally removed from your personal estate, which – if successful – means there is nothing left for the probate court to deal with.

When you pass away, the co-trustee or successor trustee can settle your trust more quickly than during probate, allowing your named beneficiaries to inherit your wealth as you intended faster as well.

Can I Still Control Assets in My Trust?

The amount of control you have over the assets you fund into your trust depends on the type of trust you establish. Generally, there are two broad categories of trusts out there: revocable and irrevocable.

The terms of a revocable living trust, for example, can be altered to allow the grantor (you) to use property funded into the trust, such as your home or bank accounts. You can also decide to remove this property entirely from the trust, if you so choose.

As you might expect, the terms of an irrevocable trust are not revocable by the grantor. Once established, an irrevocable trust may only be changed by its beneficiaries or not at all. The upside of this, however, is that irrevocable trusts typically provide asset protection from the grantor’s creditors, which can protect wealth for the grantor’s children, grandchildren, or other relatives.

Protect Your Affairs with Powers of Attorney

Your estate plan should address more than the postmortem affairs of your estate. It’s common for people to experience periods of incapacitation before they pass away. During these events, they need help from people they trust to manage their finances and more.

Three Important Attorney Powers in Florida

A power of attorney isn’t just one thing. Like many arrangements in your estate plan, there can be as much nuance to what you wish your power of attorney to accomplish, when it triggers, and who’s in charge.

1. Durable Power of Attorney

The durable power of attorney is very common. Establish to give a trusted loved one legal authority to make important financial and medical decisions for a loved one, this power of attorney typically triggers when the latter party becomes so severely sick, injured, or mentally diminished to manage their daily care and financial affairs.

The durable power of attorney may only expire when the person who created the power is of sound mind and physically able to revoke it (such as if they recover from a coma), or this person passes away.

2. Special Power of Attorney

When compared to a durable power of attorney, a special power of attorney is much more limited in its scope. Special powers of attorney are typically very specific when it comes to which powers the document confers, the duration of those powers, and when the powers trigger.

For example, a special power of attorney can be used if you anticipate you will be temporarily unable to take care of important affairs for a period of time and want someone else to handle them for you. This can occur when you may be physically injured but of sound mind, but the circumstances that can trigger a special power of attorney can include international travel and more.

3. Medical Power of Attorney

When you create a medical power of attorney, you assign a trusted person to act as your agent in affairs concerning your medical care. This can be incredibly important if you are incapacitated and unable to communicate your wishes when an event you didn’t anticipate in your advanced directives occurs.

Protect Your Health with Advanced Medical Directives

Advanced medical directives are legal documents that allow individuals to make decisions about their own health care should they become unable to do so.

These documents name a health care surrogate, who is authorized to make decisions regarding the individual's care if they cannot do so. They also provide instructions for end-of-life treatment options such as feeding tubes or life support.

Through advanced medical directives, patients can clearly state their wishes and preferences regarding medical treatments, including whether they receive or refuse special treatments or procedures. Having an advanced directive ensures that the patient's wishes will be respected when making important healthcare decisions.

Additionally, it helps relieve family members of some of the burden associated with decision-making during difficult times as it provides clear guidance about what the patient would have wanted. It’s important to note that each state has its own laws and regulations governing advanced medical directives, so it’s critical to understand the requirements for Florida before creating a directive.

Designate Beneficiaries to Important Policies & Accounts

Beneficiary designations in Florida are an important part of estate planning. This type of legal document can be used to transfer assets from one person to another upon death, and specify how those assets should be handled.

Assets that may be transferred through beneficiary designation include life insurance policies, retirement accounts, bank accounts, trusts, and more. It’s important for those living in the state of Florida to understand the laws surrounding this process in order to ensure their wishes will be respected upon their death.

To avoid any issues with asset transfers, it’s wise for individuals in the state of Florida to consult an experienced estate attorney who can provide guidance on creating a valid beneficiary designation and making sure all necessary documents are completed properly.

Contact Dorcey Law Firm Today to Learn More

At Dorcey Law Firm, we understand that estate planning is an important step for many individuals and families. Our attorneys will work with you to create a comprehensive plan that meets your needs and helps ensure the security of your assets in the future.

We can help draft wills, living trusts, power of attorney documents, advanced medical directives, and more. We also offer assistance with probate proceedings, guardianship issues, taxation matters related to estates and trusts, business succession plans, and other legal services.

With our combination of legal expertise and personalized approach to client service, we strive to make the estate planning process as smooth and stress-free as possible.

Contact us today to learn more about how we can help you protect your assets now and in the future.