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Estate Planning

Make Your Plan Effective

Keep your intentions clear

Draft a letter of instructions. A letter of instructions will let your family members know that initial steps they should take after you’re gone. In the Letter be sure to

  • Indicate where you keep important documents, such as bank and investment statements, your will, and life insurance policies.
  • Provide the names and addresses of people to contact, including your attorney, investment professional, accountant, and executor of your estate.

Keep your will current. Most attorneys recommend that you review your will every two years. Be sure to review it soon after any major life event, such as a divorce, a remarriage, a birth, or an adoption.

If necessary, take the time to retitle your assets. If you establish a living trust, be sure to take the time and transfer your assets into the trust. If you’re using bypass trusts and you live in a state that does not have community property laws, any assets you own jointly cannot get into a bypass trust. To make sure bypass trusts can be funded when you or your spouse dies, your assets must be owned in your individual names.

Avoid Common Mistakes

  • Writing a “sweeatheart will.” Leaving everything to your spouse may seem like the simplest, most romantic thing to do. But a sweetheart will can unnecessary increase the taxes that your estate will incur when it eventually passes to your children or other heirs.
  • Holding assets jointly with children. Putting anyone other than your spouse as joint owner of an account can create unexpected problems. If the other person gets into financial trouble, creditors or the courts could go after the money in your account. Other steps- such as establishing a living trust or using transfer on death registrations for securities and mutual funds- can allow an easy transfer of assets at your death without creating the problems joint ownership does.

Bear in mind if you’re unmarried

  • Remember that property shared by unmarried couples is generally governed by contract, not family, law. Whoever is listed on the title of the asset is considered the owner unless there is an agreement to the contrary. If you die, your partner – unlike a spouse- won’t have any legal rights to assets or to property on which they were not a registered legal owner. Your partner can establish those legal rights only if you have an agreement that he or she was part owner. In a few states, a verbal agreement may be sufficient if the surviving partner can supply evidence that the agreement existed. But most state will only accept a written agreement
  • Have a will and consider using trusts to protect your partner. If you die “intestate” – that is, without a will- your partner won’t have any legal rights to assets held in your name because the states’ intestacy rules protect only legal relatives, and an unmarried partner is not considered a legal relative. For that reason, it’s essential that you don’t put off writing you will.

You can use trusts to limit the taxes on your estate and to allow your partner to inherit a greater portion of your assets.

Know the Basic Tools

Common Estate Planning Documents:


A will is the legal document you can use to outline how you want your property and assets divided among your family members and other heirs. In your will, you also can name guardians for your children. Your will should also identify whom you want to serve as the executor of your estate. The executor will gather all your assets after you’re gone, ensure that a tax return is filed for your estate, and oversee the process of distributing assets to your heirs.

Living Will

In this document, you can specify the type of medical treatment you wish to receive and under what circumstances the treatment should or should not be administered.

Basic Living Trust

With a basic living trust, you transfer the ownership of all your assets and property to a trust. The assets in a living trust don’t have to go through the costly, time-consuming- and public- process of probating your estate in state courts. The trust assets can pass directly to the beneficiaries you designate. You can appoint yourself as both trustee and primary beneficiary so that you can maintain complete control over the trust before your death.

Durable Power of Attorney

With this document, you can name someone to manage your financial and personal affairs if you no longer can. Among the powers you can grant are the authority to make gifts, conduct real estate transactions, assign ownership of a life insurance policy, or change a policy’s beneficiary. If you have a basic living trust you may not need to use a durable power of attorney because your successor trustee can make decisions about the assets you own in your trust.

Health Care Proxy

This document enables you to designate another person to make health care decisions on your behalf in you become incapacitated. Hospitals, doctors, and other health care providers are required to follow your proxy’s decision as if you were making them.

Long Term Care Insurance

If you’re wealthy enough to cover the costs of a prolonged nursing home stay and if you’d rather not have to impoverish yourself to qualify for the nursing home coverage provided by the state Medicaid programs, you’ll need to consider buying long-term care insurance. Your insurance agent or investment professional can help you find a policy that provides sufficient coverage without being prohibitively expensive.

Investacorp does not provide legal advice or services. Please consult your legal advisor regarding your specific situation.