Jeff Ritchie

Jun 22 2016

5 Estate Planning Documents You Should Consider

5 Estate Planning Documents You Need

There are a number of important legal documents you should consider when developing your Estate Plan.

  1. Will

    A Will is a document that directs what happens with your property at your death.  In your Will, you name an Executor.  An Executor can be one or more persons, a bank, or a combination of the two.  The role of your Executor is to gather and account for all of your assets, file final tax returns, and ultimately distribute your net assets according to your wishes under the Will.

  2. Durable Power of Attorney

    A “Durable Power of Attorney” allows you to name an “agent” to handle your financial affairs (i.e. pay bills, manage assets, file taxes, etc.). In Iowa, a Power of Attorney can be made effective immediately or it can be set up to become effective only upon disability.  Care must be taken in choosing your agent as there is typically no court oversight of their actions.  If you become incompetent and do not have a Durable Power of Attorney, someone may need to petition the court to be appointed conservator for you.  This process typically takes more time and is more expensive.

  3. Durable Medical Power of Attorney

    A “Durable Medical Power of Attorney” allows you to choose someone to make medical decisions on your behalf if you are not able to.

  4. Living Will

    A “Living Will” is a written document that tells your doctor whether life-sustaining measures should or should not be taken in the event you become terminally ill or incapacitated. Alternatively, you can consider an Advance Directive document which will cover more options and more detailed end-of-life planning.

  5. Revocable Living Trust

    Under some circumstances, individuals prefer to avoid the court-supervised probate process by holding all of their assets in a Revocable Living Trust. Similar to a Will, a Revocable Living Trust allows you to direct what is to happen with your assets after your death. Unlike a Will, a Living Trust also allows you to direct what is to happen if you become incapacitated.  Since it is revocable, it can be changed at any time prior to death or incapacitation.  Individuals commonly name themselves as trustee during their lifetime and then name another individual and/or bank to serve as “Successor Trustee” to step in and manage their affairs if they become incapacitated and otherwise to wind up their affairs at death.

    If you are utilizing a Revocable Living Trust, it is important to make sure all of your assets are held in the trust at your death.  Life insurance, retirement accounts, and annuities are the exceptions.  These assets are distributed at your death based on a beneficiary designation you would have completed.  If you are hoping to avoid probate, it is important to review your beneficiary designations for these assets to make sure they are not payable to your Estate at death.  If any assets are payable to your Estate, a court-supervised probate proceeding may be required.

You should consult with an Estate Planning Attorney to prepare your Estate Planning documents.  Although it will cost some money, using a competent attorney will ensure that your wishes and goals are carried out.  Things change over time.  It is important to review your estate plan and beneficiary designations on a regular basis to make sure your plan still fits your situation and current goals.

We invite you to contact a Wealth Management Professional online or call 1-800-899-8858. We’d be happy to answer any questions about developing your Estate Plan or any other financial or retirement planning questions you may have.

Some trust products and IRA contributions/balances are not a deposit, not FDIC insured by any federal government agency, not guaranteed by the bank and may go down in value.
Jeff Ritchie

About Jeff Ritchie

Jeffrey Ritchie, JD is Vice President with Trust and Wealth Management at Hills Bank’s North Liberty location on Forevergreen Road. He has been at Hills Bank since 2005 specializing in personal trusts and estate administration. Jeffrey’s professional expertise includes estate planning and probate, real estate, and income tax preparation. Jeffrey earned his undergraduate degree at the University of Northern Iowa and continued his education at the University of Iowa College of Law. Prior to joining the bank, he practiced law in the Amana and Marengo communities. Jeff can be reached at 1-800-899-8858.

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10 Responses to 5 Estate Planning Documents You Should Consider

  1. I would never dream of trying to figure out how to set up a will or trust without an expert there to guide me. However, I do think that revocable living trusts are the better than the standard will. Mostly because they get around probate. Now if I understand correctly they function almost exactly like a will, except all assets are technically not mine, but the trusts at my death, right?

    • Jeff Ritchie Jeff Ritchie says:

      James, you are correct. A revocable trust functions much like a will. During the owner’s lifetime, the revocable trust assets still belong to them since the trust can be revoked at any time. However, following the owner’s death, the revocable trust becomes irrevocable and at that time it operates much like a will in that the trust document dictates what is to happen to the trust assets following the owner’s death. Thanks for reading Hills Helps!

  2. Maggie says:

    I really like the fact that the revocable living trust can be changed at any time before death. Having that ability to change things at will is a huge relief, especially if you find your financial situation changing frequently. Is it required for you to have your attorney to help you when you make changes to the living trust, or is it something that you can do on your own?

    • Jeff Ritchie Jeff Ritchie says:

      Maggie, that is an excellent question. Like a Will, a revocable trust is a legal instrument. The requirements for proper execution may vary from state to state. We always recommend utilizing an attorney if you wish to make any changes to your revocable trust agreement. Thank you for reading Hills Helps!

  3. Sarah Smith says:

    My dad is trying to get everything in order in case he dies. Thanks for the advice about how you should get a will and name an executor. Another thing to consider is getting an attorney to help you pull together all the documents you need for estate planning.

    • Jeff Ritchie Jeff Ritchie says:

      You’re welcome, and you’re correct, we recommend consulting with an Estate Planning Attorney. Thanks for reading Hills Helps!

  4. My friend’s father was diagnosed with a rare disease and his family has been trying to get all of his affairs in order. You mentioned that a “Living Will” is a written document that tells your doctor whether life-sustaining measures should or should not be taken in the event you become terminally ill. Do most lawyers offer assistance in drafting wills? It seems hiring an attorney to help him may be very beneficial.

    • Jeff Ritchie Jeff Ritchie says:

      Derek, I can only speak for what generally happens here in Iowa. My experience has been that most attorneys in Iowa who prepare Wills or Revocable Trusts will also recommend and prepare, at the client’s request, a Living Will document identifying the client’s healthcare wishes as to life-sustaining measures. You are correct that getting an estate planning attorney on-board early would be very beneficial for the family to explain all of the options and to get everything in order. Thanks for reading Hills Helps.

  5. mkrahman says:

    Jeff Ritchie, is this five documents enough to estate plan when we see a big list with check marked by the attorney?

    • Jeff Ritchie Jeff Ritchie says:

      Thank you for your question. The blog post was intended to be a general outline of some of the key documents that are typically included in one’s estate plan. Most estate planning attorneys do have a “checklist” of information and items they want to review before completing your estate planning documents. In particular, it is often important for the attorney to have a snapshot of your assets and liabilities so they can determine whether additional planning is necessary such as updating beneficiary designations or establishing a testamentary trust due to federal or state estate tax considerations.

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