What is the most important component of an estate plan? This is a question that comes up a lot in our practice, and as you might guess, different families will have different answers.
The Trust: Many families feel that this is the heart of the estate plan, and as such the most important part. As the document that outlines your wishes for distribution amounts, designates beneficiaries, nominates trustees, defines your incapacity and lists your assets—there is definitely reason to think the trust an important part of your plan.
Healthcare Directive: Some people are more concerned with how their end-of-life wishes are carried out than with the distribution of their estate. Those people consider the healthcare directive—the document that sets out your wishes for medical treatment, resuscitation, and healthcare agents—the most important component of an estate plan.
Guardianship Documents: Parents of young children are often more concerned with the guardianship portion of their estate plan than any other portion; they trust that as long as their children are in the hands of loving and responsible guardians all the rest is secondary.
The Will: Some believe the will to be the most important document. This is especially true of single people at the older or younger end of the spectrum, who feel they don’t have enough assets to require a trust.
Powers of Attorney: Very few people feel this document by itself is the “most important”, but most people understand that as the document that confers fiduciary powers on your chosen agents, the Power of Attorney has an importance of its own.
These components are all helpful and necessary pieces of an entire estate plan, but the most important part of your estate plan is something else entirely; something grantors and beneficiaries, rich and poor, young and old, attorneys and clients alike can all agree on—the most important part of your estate plan is creating it!