An estate plan can include several different documents, including those described here.
- Will. In your will, you state how you want your assets distributed after you die. You can also name a guardian and conservator to look after your minor children if both you and the other parent have died. And you can designate a personal representative to administer your estate. (Be aware that not all of your assets will be covered by your will. For example, your will won’t cover an insurance policy with designated beneficiaries, property you put in a trust, or jointly owned property.)
- Living Trust. A living trust is often used to avoid or minimize probate after you die. While you’re alive, you’re the trustee. You can use the trust assets any way you want. After you die, a successor trustee named by you takes over, and follows your instructions for asset distribution. You can also use a living trust to delay the distribution of a child’s inheritance beyond the age of 18. And a wealthy person might use a living trust to reduce or eliminate the Federal Estate Tax.
- Financial Power of Attorney. In a power of attorney, you designate someone – usually a spouse or adult child – to handle your financial affairs. This can be helpful, for example, if you travel a lot and need a back-up person to sign checks for you or to handle other financial transactions.
- Appointment of Patient Advocate. This document (sometimes called a living will) lets your spouse, or perhaps an adult child, make medical decisions for you if you’re unable to do it yourself. You can specify the type of medical care you prefer, and indicate if and when you’d like life-prolonging measures to cease.
The attorneys at the Ann Arbor firm of Hamilton, London, & Davis can advise you on the estate planning documents best suited to your situation.