The Wealth & Wisdom Blog

Our house is often filled with the music of our middle school flute player and high school trumpet player.  These sounds have become agreeable after a few months of continuous and concentrated practice.  Our kids are practicing for upcoming band concerts, when the sounds of their instruments will be combined with those of their classmates. Similarly, a comprehensive estate plan involves the coordination of estate planning instruments.

In this month’s update, I summarize certain estate planning legal documents and the importance of each such instrument within a comprehensive estate plan.

• Financial Power of Attorney: Appoints the person(s) holding legal powers to make financial and legal decisions throughout one’s lifetime. This instrument is utilized when you are no longer able to make financial decisions during lifetime.
• Health Care Directive: Appoints the person(s) holding legal powers to make health care decisions during your lifetime. This instrument is utilized when you are no longer able to make your own health care decisions.
• Beneficiary Designations: Directs the change in ownership to the named beneficiary upon your death. This instrument, filed with the administrator of the retirement account or life insurance company, becomes effective to transfer ownership upon your death.¹
• Tangible Personal Property List: Directs the distribution of tangible personal property assets upon the death of the maker of the list.  This instrument is utilized to distribute indivisible and sentimental items, such as jewelry and artwork.
• Trust Agreement: Directs the distribution of assets owned by a trust. This agreement outlines who benefits from the assets owned by the trust, the specific directions on how those people or charities are to benefit from the trust assets, and the identification of the trustee, responsible for fulfilling the trust purposes. If the trust is a revocable trust, the agreement directs how remaining assets are to be distributed at the death of the trust creator.
• Last Will: Directs individually owned assets at death. ² In situations where the Will creator also created a Revocable Trust, the Will should direct remaining assets to the Revocable Trust, to be administered as part of the trust agreement.  In other situations, the Will directs for the distribution of remaining assets directly to family members or charities following death.

In preparing for upcoming band concerts, the band director would not focus solely on the woodwinds section without also working with the brass section. Likewise, it is important that legal counsel assist clients in coordinating each of the key estate planning instruments with one another.  While our law firm is not qualified to coordinate musical instruments, we are qualified to coordinate estate planning instruments. We would be honored to help in this coordination and look forward to hearing from you.