Yes, everyone needs an estate plan. An estate plan is the best way for an adult to dictate not only how they want their property managed and distributed, but also whom they want making important decisions on their behalf, during periods of incapacity and following their death. Most people can accomplish their goals with an estate plan that includes a Will, Trust Agreement, Durable Power of Attorney, and Patient Advocate Designation.

A Will is a document that tells the probate court how to divide and distribute a person’s assets upon their death. It can also be used to nominate a guardian for minor children in the event of a parent’s death. A Will, on its own, does not avoid the probate process.

A Living Trust is a legal entity separate from the person establishing it, which person is known as a Settlor. A Settlor creates a Trust Agreement, which is a written document that details how Trust property is to be managed and distributed in the event of the Settlor’s incapacity or death. A Settlor also appoints a Trustee, who is responsible for carrying out the terms and conditions of the Trust Agreement. The main purpose of a Living Trust typically is to avoid probate upon the Settlor’s death by ensuring that the Settlor’s property is transferred to the Trust either during their lifetime or upon their death. 

A Durable Power of Attorney is a document in which an individual (known as a “principal”) appoints another person as agent to make day-to-day decisions on the principal’s behalf.  A Durable Power of Attorney can be made effective upon either the principal signing the document, or the principal becoming unable to make their own decisions.

A Patient Advocate Designation is a document in which an individual (known as the “principal” or “patient”) appoints another person as agent to make medical and mental health decisions for the principal in the event that the principal becomes unable to make those decisions themselves. 

Probate is the process of transferring assets from a deceased person to their beneficiaries or heirs. Probate is required when an individual dies with assets in their own name and without a joint owner or beneficiary designation. During the process, a Personal Representative is appointed by the probate court (typically in the county of which the deceased person was a resident) to act on behalf of the decedent’s estate, including paying bills and distributing the remaining property to the persons entitled to it. 

An individual can often avoid probate by ensuring that they do not have any assets in their own name and without a joint owner or beneficiary designation following the individual’s death. A common approach to avoiding probate is through the creation of a Living Trust, to which the individual can transfer their assets during life or upon death.

A Will is still needed even if an individual has a Trust. In the event that an individual with a Trust dies before they properly transferred all their property to the Trust, a Will tells the probate court how to handle the property remaining in the individual’s name. A Will is also needed to appoint a guardian for minor children, which cannot be done through a Trust Agreement.