4-Step Family Wealth Transfer Plan - Part C

We discussed step 2 here, now step 3 of family wealth transfer.

Step 3. Focus on Your Legal DocumentationsBefore you meet with an estate planning attorney, you will need to pull together key documents.

• Start by getting copies of beneficiary designations for all your accounts, including insurance policies; annuities; and saving, brokerage, and retirement plan accounts.
• Next, learn about the 2 common documents found in an estate plan:

• A will is an essential legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children when you die.
• A trust is a more complex legal structure that contains a set of instructions on exactly how and when to pass assets to trust beneficiaries. Trusts are a tool that can allow you to control when and to whom your assets will be distributed. 

• Then consider additional supporting documents intended to protect you and provide instructions in the event of your incapacity. Among them:

• A power of attorney appoints an agent to act on your behalf regarding financial and other matters while you are alive.
• A health care proxy names the agent who can make health care decisions for you if you are unable to communicate for yourself.
• A HIPAA release informs doctors and other hospital staff of people who can visit you and the information they can receive if you are unable to state your wishes directly. Without a properly executed HIPAA release, your named agents may not have the ability to talk with your doctors or access your medical records.
• An organ donation form enables you to state your desire to have all or part of your body donated for transplant or medical research.
• A living will or medical directive outlines your wishes regarding life‐prolonging medical treatments, and may vary depending on your state of residence.
• A final wishes letter of intent is not a legal document but can be a catchall for anything you want to document, including the type of service, burial, or cremation you want.
• A letter of instruction usually contains the critical information your family will need in the event of your incapacitation or death, including a contact list of your advisers, a current inventory of your assets, a list of legal documents, and instructions on where to find important information.

• Determine key roles. Choosing and documenting the appropriate people to fulfill the following key roles in your estate plan is a critical task for you and your family. It is also important to make sure the people you designate are comfortable taking on these roles and that you consider successors for each of them:

• Personal representative/executor will work with your attorney—and potentially the court system—to ensure the collection and disposition of your assets to the appropriate people in accordance with your wishes.
• Trustee is the individual or professional corporate trustee who will hold the trust assets on behalf of the trust beneficiaries. The trustee has the fiduciary obligation to make sure trust assets are properly invested and distributed according to the instructions in your trust.
• Guardian is the individual who is legally responsible for the personal and property interests of your minor children. Note: The parties you designate to care for your children do not have to be the same parties who manage their assets.

• Meet with your attorney. Typically, your first meeting offers the opportunity for the attorney to describe their estate planning process and review any documents you bring to the meeting. Your attorney should also discuss their fees, tell you how long it will take to draft your plan's documents, and answer any questions you or your family may have.

 
​Once you have chosen an attorney, the process usually has 3 phases:

• Draft and execute your documents: At this stage, generally your attorney will draft and review all your new estate planning documents with you and have you sign them. Depending on your state of residence, there may be specific requirements as to the form or content of these documents or the manner of execution. For example, some states require that signatures be witnessed or notarized if your family's needs or plans change, so you'll want to ensure that you can amend your documents.
• Implement your estate plan: After you have signed your documents, your attorney can help you with the follow‐up steps required to complete your estate plan. These may involve retitling assets between you and your spouse, completing or amending beneficiary designations, and retitling assets in the name of a trust.
• Store your documents in a safe place: You can either store your estate plan and other important documents in your attorney's office or select a fireproof place—such as a bank safe-deposit box—that someone close to you can access in an emergency.  You can also use a secure virtual safe such as Fidsafe.

Read step 4 here.