13 Essential Documents for Every Living Trust-Based Estate Plan
Creating a comprehensive estate plan ensures that your assets are managed and distributed according to your wishes while providing peace of mind for your loved ones. Below, we outline 13 critical documents that every estate plan should include and explain their significance. At Treetown Law, we organize your essential documents in a leather-bound estate plan portfolio, and we provide digital versions of each document as well.
1. Plain Language Summaries
The Trust Summary acts as a concise, plain-language guide to the trust's contents, breaking down each article for easy reference. The Name and Fiduciary Summary lists all individuals in the estate documents, providing a quick reference for roles like trustees, personal representatives, or guardians. These summaries save clients from flipping through lengthy legal texts when quick answers are needed.
2. Revocable Living Trust
A Revocable Living Trust serves as the cornerstone of many estate plans, offering benefits like:
Incapacity planning: Ensures management of assets if the trustmaker becomes incapacitated.
Probate avoidance: Saves time and money for heirs.
Privacy: Keeps financial matters out of public record.
Protection: Safeguard assets for young or vulnerable beneficiaries.
Trusts are highly customizable and should always be created using reputable, up-to-date forms which align with state laws and best practices. A bad trust can be worse than having no trust at all, so always consult a lawyer when considering a Trust. Treetown Law uses WealthCounsel for its highly customizable and state-of-the-art forms.
3. Certification of Trust
The Certification of Trust is your Trust’s “birth certificate.” It proves the trust’s existence and contains information that financial institutions will want to know, allowing you to keep the full trust agreement private.
4. Trust Assets Assignments
Adequately funding a trust ensures its effectiveness. Key assignments include:
Personal Property Assignment: Transfers personal items to the trust, avoiding probate.
Transfer on Death (TOD) Assignments for Motor Vehicles: Allows vehicles to bypass probate, with special considerations for high-value cars.
TOD Assignments for Business Interests: Simplifies succession while avoiding burdensome reporting under laws like the Corporate Transparency Act.
5. Personal Property Memorandum
This fill-in-the-blank document allows clients to specify who receives personal items, avoiding default rules that direct property to spouses or children. Trustees distribute items per these written instructions.
6. Pour-Over Will
While a trust minimizes the need for probate, a Pour-Over Will is there just in case an asset is left out of the Trust. It accomplishes three key tasks:
Direct any remaining probate assets into the trust.
Name a personal representative.
Appoint guardians for minor children.
7. General Durable Power of Attorney (DPOA)
A DPOA grants an agent authority to manage financial and legal affairs during incapacity. Michigan's updated DPOA laws (effective July 2024) make having a current document essential. These can be immediate or springing (effective upon incapacity), though immediate DPOAs are typically more practical.
8. Patient Advocate Designation
This document appoints a trusted person to make medical decisions if the client cannot. It also includes:
End-of-life care preferences.
Funeral representative designation.
Organ donation and body disposition instructions.
Nomination of a guardian should one be needed for the patient.
9. Advance Health Care Directive
An Advance Health Care Directive communicates a client’s medical wishes directly to healthcare providers. While the Patient Advocate’s decisions typically prevail, this document ensures the client’s preferences are clear.
10. HIPAA Authorization
A HIPAA Authorization allows named individuals to access private medical information, streamlining healthcare management for spouses or family members.
11. Temporary Power of Attorney for Minor Children
This document ensures minor children are cared for during emergencies or planned absences, allowing designees to assume custody without court intervention for up to 180 days.
12. Temporary Patient Advocate for Minor Children
Complementing the above, this document enables designees to authorize medical treatment for minors during a parent's absence or incapacity.
13. Asset Inventory and Trust Funding Instructions
An Asset Inventory lists disclosed assets and trust funding recommendations, simplifying trust funding. It also comprises as a comprehensive list of your assets for a someone acting with Power of Attorney, as Successor Trustee and/or as Personal Representative. The Asset Inventory is a living document that should be updated regularly.
Wraparound Services
In addition to the above essential documents, a thorough estate plan often includes additional services:
Emergency document access: Wallet cards store critical healthcare documents. At Treetown Law, every estate plan includes a year membership to DocuBank. With your permission, we will also preload the wallet cards with your health care powers and temporary powers for minor children so that a first responder can access the documents in an emergency.
Trust reviews: For clients who are trust beneficiaries, we have found that it can be helpful to have another set of eyes on such documents that can be quite dated. This allows the lawyer to flag issues and identify opportunities to simplify a plan that can be resolved while the trustmakers are still alive and have capacity.
Deeds: Many families who create trusts use deeds to avoid probate for their home.
Additional Types of Estate Plans
Not everyone needs a trust. Some people need different kinds of trusts. For unique needs, other types of plans include:
Will-based plans: Straightforward estates that can accomplish a client’s goals using probate avoidance tools such as beneficiary designations and ladybird deeds.
Young adult plans: Essential documents for individuals 18+.
Specialized trusts: Special Needs Trusts, Standalone Retirement Trusts, Charitable Remainder Trusts, and Irrevocable Life Insurance Trusts, to name a few.
We’re Here to Help
Estate planning is more than documents; it’s about creating a plan tailored to protect your family, fulfill your wishes, and minimize complications. By working with experienced professionals, clients can ensure their estate plans cover all critical elements, providing clarity and peace of mind.
Treetown Law is here to help you every step of the way. Please contact us today to get started!
