What Does an Estate Plan Include?

The Main Estate Planning Document: Will or Trust

The main estate planning document is either a will or a trust depending on the type of estate plan the client wants. A trust-based plan is designed to avoid probate and requires more work to set up and maintain. Probate is when the court oversees the administration of an estate. A will or trust will control how many assets are distributed. An important part of a will and trust is the nomination of who the client wants to administer their estate. This individual is the trustee for a trust-based plan or personal representative (aka executor) for a will-based plan.

Documents to Plan for Incapacity: Powers of Attorney

Another important part of an estate plan includes planning for incapacity. This is important while the client is still living, but does not have mental capacity to deal with their financial affairs or to make medical decisions. An estate planning attorney will help the client pick an agent to make decisions on the client’s behalf and draft the document to define the scope of the agent’s power.

End of Life Decisions: Healthcare Directive

Another document that is prepared as a part of the typical estate plan is the healthcare directive. This is the document that allows you to choose whether you would want to be kept alive artificially if you were in a terminal condition. This document is not the same as a POLST (Physician Orders for Life Sustaining Treatment). A POLST is filled out with the assistance of a doctor and directs how emergency personnel should respond when called to the site of an injury or illness.

Estate Planning Attorney vs. Estate/Probate/Trust Administration Attorney: What’s the Difference?

What Happens If I Die Without an Estate Plan?

What Problems Can Come from Dying Without An Estate Plan?

How Much Does an Estate Plan Cost?

The short answer is—it depends. The more time dealing with complex issues, drafting your plan, and setting up assets to be distributed in a special way, the higher the cost of the estate plan.

What Factors Determine the Cost of An Estate Plan?

Complexity and therefore expense to a plan can be added in various ways. A plan where a client wants to leave their assets in equal shares to responsible adult children will be less complex than a client who has young children (or an irresponsible adult child) and therefore needs to plan for a person to hold money on the beneficiary’s behalf in a trust or custodianship. Complexity can also be added when a client’s estate is large enough to be subject to estate tax and the client wishes to incorporate estate tax planning in order to minimize such tax.

The types of assets a client owns may also add complexity to their estate plan because special provisions may need to be made to plan for such items. Owning a business, for example, can add additional planning. Also, the income tax consequences of your assets can add complexity. IRAs are subject to an array of rules regarding their taxability depending on who inherits the account. Non-retirement investment accounts are not subject to the same income tax rules. Therefore, planning an estate with a special plan for a large IRA may be more complex than planning for a different client with the same amount in assets, but invested in a different way.

Does a Trust-Based Plan Cost More Than a Will-Based Plan?

How Much Does It Cost to Update an Existing Estate Plan?

Final Thoughts