Sometimes when I’m out and about and I say that I’m an estate planning attorney, the person I’m talking to looks a little confused. “Wills and trusts,” I’ll add for clarification, which usually helps. People generally know what a will is, at least, even if they’re a little fuzzy on the details.
“Estate Planning” does, I have to admit, sound pretty vague- but it’s a better description of the practice area than “Wills and Trusts” or “Trusts and Estates” or any of the other options out there.
The American Bar Association defines Estate Planning as
A process by which an individual designs a strategy and executes a will, trust agreement, or other documents to provide for the administration of his or her assets upon his or her incapacity or death. Tax and liquidity planning are part of this process.
It’s a good definition- if a bit dry- because estate planning is comprehensive. The process involves a discussion about the client's family, their assets, and their goals. I talk with clients about their family and friends, determining who’s the right person to manage finances if the client is incapacitated, to have guardianship of a client’s children, or to make the client’s medical decisions if the client can’t do so. We talk about bank accounts, real estate, cars- everything down to the client’s jewelry and the sentimental items they want to pass on to their children. We talk about burial instructions, organ donation, and specific desires the client has for end-of-life care. Once we’ve had that conversation, we can talk about the legal documents that suit their needs and goals.
A basic modern estate plan consists of a Will, a Durable Power of Attorney, a Healthcare Power of Attorney, and a HIPAA Health Insurance Privacy Release Form. For some people, additional documents such as Trusts, Burial Directives, and Nominations of Guardianship may be appropriate. Estate Plans can vary widely, since they depend on your goals and your wishes.
When I am working with estate planning clients, my goal is to develop a plan that suits their goals, their family, their assets, their wishes and hopes and fears. The goal is for the client to leave my office able to sleep better at night, because they know that they’ve written down what they want and have given their loved ones the legal authority to carry their wishes out if the unexpected happens.
So estate planning is a process. Legal documents such as wills and trusts are the tool. It’s the client’s job to tell me what they want; it’s my job to know which documents and strategies to use to get them there. The process may also involve a financial advisor, CPA, or other professional, as we want to make sure we address all of the client’s needs- for example, making sure that the client’s beneficiary designations on insurance policies and retirement accounts are in harmony with their new estate plan.
At the end of the estate planning process, the client has an estate plan that ensures that, if they become incapacitated or pass away, their wishes are carried out and their loved ones are cared for. That only happens with comprehensive planning- the documents in any individual estate plan work with each other to plan for many different contingencies. Just drafting a will or a power of attorney isn’t enough.
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Next time: why estate planning is important.
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