Core documents for most estate plans include:
• Living Trust
(also known as an Inter Vivos Trust or Revocable Trust). Works like a Will, but avoids costly and time-consuming probate proceedings.
(For estate planning couples, one will each) known as a “Pour-Over Will” because it “pours over” omitted assets into the Revocable Trust. For property that passes by a will alone, probate is usually required.
• Durable Power of Attorney for Property Management
(For estate planning couples, one each); “Durable” because it remains effective even if the grantor becomes incompetent. I also use this document to nominate a conservator, should one be required. A Durable Power of Attorney maintains privacy by avoiding public conservatorship proceeding, and can provide a way for your financial affairs to be managed if you become temporarily incompetent, or if you travel extensively.
• Advance Directive to Physicians
This is the current name for the former “Durable Power of Attorney for Health Care”. If you become incapable of making medical decisions yourself, it permits one or more loved ones that you select to make decisions for you concerning your medical care and final arrangements. You retain the power to revoke or change it while you are competent to do so. A separate "Do Not Resuscitate Order" may be created to work with the Advance Directive.
Estate Plans may include other specialized documents, depending upon your personal situation. Some of them are:
• Blended Family Trust: For second and subsequent marriages, with and without children, these trusts balance and control the disposition of assets that each party brings into the marriage.
• Irrevocable Life Insurance Trust (“ILIT”): These trusts decrease estate size to reduce estate taxes, and to provide cash for your survivors.
I have negotiated and drafted many of these agreements for my clients. Each agreement is tailored to the unique circumstances of the parties. These are powerful contracts that I coordinate with each unmarried party’s separate estate plan. Without these agreements, the rights of couples who live together in a non-marital relationship are controlled by complex, contradictory laws, including probate law, contract law, real property law, and a variety of laws governing titled assets, like financial accounts, real property, automobiles, insurance policies and retirement accounts.
These powerful agreements should be coordinated with your estate plan:
• Co-Habitation Agreements: Many couples choose to live together rather than marry or re-marry. Without a correctly drafted co-habitation agreement, confusing and contradictory laws control your rights when circumstances change.
• Non-Marital Trusts: When unmarried persons acquire a jointly owned asset, such as a residence, placing that asset into a separate trust with provisions for its division and distribution avoids costly disputes following the death or disability of one of the parties or their separation. The non-marital trust is coordinated with each party’s separate estate plan. Non-marital trusts can also be utilized in a divorce property division to hold separate interests in hard to divide properties and maintain a fiduciary relationship between divorced parties.
Family Law Agreements
• Pre-Nuptial Agreements: Also known as “pre-marital agreements”, these powerful contracts, made before marriage, control property rights and important probate rights, including the right to occupy property owned by either spouse, and the right to receive financial support from the estate or trust estate of a deceased spouse. These agreements do not become effective until the parties to them marry.
• Post-Nuptial Agreements: Also known as “post-marital agreements”, these contracts are entered into by married couples and domestic partners to govern each of their property rights. For couples who choose to live apart they function as a “Divorce Substitute" that divides property and property control, while preserving benefits that would otherwise be lost in a divorce.
• Marital Settlement Agreements. When a marriage or domestic partnership is terminated, the Court issues a family law judgment that incorporates a written marital settlement agreement. The judgment characterizes property as separate property or community property, divides community property, including retirement benefits, sets child and spousal support, and allocates debts and tax effects between the divorcing parties. They profoundly affect your future life, relationships and estate plan.