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The Estate Planning Basics

Estate planning is not a one-size-fits-all endeavor. It is a customized plan designed to best protect each client and their loved ones. Most estate plans should include some or all of the following components:


A will (sometimes referred to as a last will and testament) is a written document used to appoint a personal representative (or executor) to handle the person’s affairs upon his or her death, explain how his or her property and money are to be distributed, and appoint a guardian to care for minor or dependent children.

Pour-Over Will

A special type of will in which the person’s trust is named as his or her beneficiary. This document is used in case the client has created a trust but did not fully fund (i.e. transfer or retitle assets) prior to death. The pour-over will is admitted to the probate court, and everything is transferred to the trust through the probate proceedings.

Revocable Living Trust

While there are many different types of trusts, a revocable living trust is often the foundation of an estate plan. A revocable living trust is a written agreement in which a trustee is appointed to hold title to and manage property for the benefit of one or more beneficiaries. In many instances, the client will serve as the initial trustee and primary beneficiary. Upon the client’s incapacity, the trust property will be managed by a nominated successor trustee for the benefit of such client with little interruption and no court involvement. Upon death, the successor trustee manages and distributes the assets according to the trust’s terms.

Financial Power of Attorney

A written instrument in which the client has named an individual to act on his or her behalf in financial affairs (e.g., signing a deed, opening a bank account, signing checks, filing taxes, etc.). There are several different types of financial powers of attorney depending upon the client’s needs and the types of transactions that might be required.

Medical Power of Attorney

This document allows the client to nominate an individual to make medical decisions on his or her behalf in the event he or she becomes incapacitated or otherwise unable to communicate. This power only goes into effect upon the inability of the client to communicate.

What If No Planning Has Been Done or Was Done Incorrectly?

If no estate planning has been done, the court will have to be involved. In the event the client becomes incapacitated, the family will have to petition the court to appoint a person to make financial decisions on the client’s behalf. The court will also have to appoint an individual to make medical decisions for the client. Because the client is incapacitated, he or she will have no way of communicating who he or she would like in those roles. The judge will have to make a determination based on investigations and the testimony of the interested parties in a very public proceeding--which may or may not reflect your client’s actual wishes.If the client dies without an estate plan, the client’s property and financial assets will be distributed through the probate process to his or her family based upon the state’s intestacy statute. In many cases, this distribution scheme is contrary to what the client would have wanted. In addition, the probate process can be time-consuming, expensive, and public. Probatemay also be required if your client has a will or if they have a trust that was not completely “funded” (assets were not properly transferred to the trust or retitled in the name of the trust). The only difference is that the will determines who receives the assets rather than state law.

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