Have you reviewed your estate planning options and decided that a Revocable Living Trust fits your estate planning needs? If so, here are five documents you may see in the journey to plan your trust-based estate.
Revocable Living Trust
In the case of a trust-based estate plan, your main document is your Trust. Unlike a Last Will and Testament, a Living Trust performs duties while you are alive and after your death. During your lifetime, your Trust will be in your own control. If you should become unable to make decisions for yourself, either because of a mental or physical disablity, your trust will pass to your pre-chosen successor trustee. This trustee will control all holdings of your Trust with your interest in mind. When you die, your Trust can easily hand over your property and other assets to your loved ones. A properly funded Trust can help your family avoid probate.
Pour Over Will
So what if you don’t get the chance to fully fund your Trust before you die? In this case, you need a Pour Over Will, which is much simpler than a regular Last Will and Testament. Your Pour Over Will focuses only on moving all unfunded assets into your Trust upon your death. It is best to keep your Trust fully funded, but if you should pass away before you can fund an item, such as a newly purchased vacation home, your Pour Over Will is there as a back-up plan.
Financial and Medical Powers of Attorney
A power of attorney allows you to name someone to make decisions on your behalf. A medical power of attorney, also called a healthcare directive, grants authority to someone of your choosing to make decisions for you regarding medical treatments and life-saving measures. A financial power of attorney on the other hand, enables someone of your choosing to handle your financial affairs, such as paying your bills and transferring funds. A financial power of attorney can also be used to fund any unfunded items into your trust if you become mentally disabled. Both of these documents should be “durable” to ensure that they remain active if you become disabled.
A Living Will can be used with any type of estate plan. This documentl is simply instructions to your medical caregivers and loved ones as to what medical treatments you prefer. You can request or deny the use of life support systems and certain types of terminal illness treatments.