Welcome to estate planning 101: The crash course on the basic estate plan.
We're not talking about the high-level, sophisticated asset protection plans here. We're talking about the bare-bones estate plan that should serve as your starting point if you're thinking of talking to an estate planning attorney.
Here is a list of the items most frequently found in a basic estate plan.
1. The Revocable Living Trust. This document can help your property pass sans probate, or in New York, without having to spend much time in Surrogate's Court. It usually lists out your assets on a schedule and defines the distribution of your assets upon death. It can also contain clauses which create sub-trusts, bypass trusts or other estate tax avoidance mechanisms.
2. The Pour-over will. The will is a staple in any estate plan. With the pour-over will, any assets not designated in your will automatically go to your trust upon your death. The pour-over will can also designate the guardian of your minor children as well as wishes in the disposition of your remains, organ donation, or other important desires.
3. The health care directive. The health care directive is also called a living will. It's a document that allows you to specify your wishes in the event that you are incapacitated. It also provides how the decision will be made to determine whether you are incapacitated. Finally, it can provide for important decisions such as 'pulling the plug' in the event of life support.
4. The financial power of attorney. Again, if you are ever incapacitated, you might need someone to handle your finances. This document allows you to name that person. You can make the document effective immediately or make it spring into action upon the occurrence of a certain event.
5. The HIPAA release form. This form allows the medical providers to release your information to certain people with regards to determining your incapacity.
These are some of the most basic items you'll find in a simple estate plan. Once you start getting into the more complex plans, you might find things such as charitable trusts, foundations, various irrevocable trusts and other estate planning tools.