Estate Planning Binder

For your benefit and the benefit of your family, it is a good idea to organize your estate planning documents into a family estate planning binder. The documents within your binder should constitute a complete estate plan. The question then is, "What documents constitute a complete estate plan?"

First, the cornerstone of the estate plan can be either a will or a revocable trust. As discussed in articles previously published in this column, whether the estate plan should be a "will based plan" or a "trust based plan" depends on your desires with respect to privacy and avoiding probate, as well as the location, size and types of assets comprising the estate. If you own real estate in more than one state, a trust should probably be the tool of choice. By creating a trust and transferring the real estate into the trust, you avoid the need to have two probate proceedings in different states to clear title to the real estate.

If the cornerstone of your estate plan is a revocable trust, it is important that you still have a will. All "trust based plans" must still have what is called a "pour over will." It is a simple will that serves as a safety net to "pour over" assets into the trust. This type of will directs the property into the trust. Basically, the "pour over will" takes those assets that were not transferred into the trust while you were alive and gets them into the trust. However, because the assets were not transferred into the trust before your death, a probate proceeding is necessary.

In addition to a will and possibly a trust, a complete estate plan should have a durable power of attorney for financial matters. This document allows legal decisions to be made regarding your financial matters in the event you become incapacitated. You may want this document to be a "springing durable power of attorney" which means the person named in the power of attorney has no power to make decisions regarding your assets until you become incapacitated.

In addition to the above documents, your estate planning binder should contain documents pertaining to medical treatment decisions. If desired, a living will for the state in which you now live should be included. A living will (also called a “directive to physician”) specifies that no use of artificial life-support systems should be used once you are beyond reasonable hope of recovery.

A medical power of attorney is also an important document. A medical power of attorney allows a specified individual to make medical decisions for you in the event you are too ill to do so.

Lastly, your estate planning binder should contain information pertaining to funeral arrangements. You should include funeral and burial information indicating the name of the funeral home and cemetery, the location of burial lots, and a list of which services, if any, have already been prearranged for or prepaid. Often, it can be very difficult for a family to harmoniously decide the numerous decisions that need to be made regarding a loved one’s funeral when emotions are high and feelings are sensitive.

In conclusion, a family estate planning binder is a wonderful way to put your affairs in order. After it is complete, you need to discuss the contents with the children or other loved ones that would be involved in using the documents. You should inform them as to the location of the original binder and consider giving a copy to one or more of these individuals. Although you hope the binder will not be needed for many years, you will feel more secure knowing that it is ready.

Jeffery J. McKenna is a local attorney licensed in three states and serving clients in Utah, Nevada, and Arizona. He is a partner at the law firm of Barney, McKenna and Olmstead, with offices in St. George and Mesquite. He is a founding member of the Southern Utah Estate Planning Council. If you have questions or topics that you would like addressed in these Wednesday articles please email him at jmckenna@www.barney-mckenna.com or call 628-1711.