What Actually Belongs in an Estate Plan?

An estate plan can sound like a folder full of documents that only becomes useful after someone dies. But some of its most important parts concern what happens while that person is still alive.

The starting point is to separate the questions. Who should receive your property? Who should handle it? And who should make decisions if you cannot make them yourself?

Start with the property

A will can direct probate property and nominate an executor. However, as discussed earlier this month, an account with a beneficiary designation may follow that designation instead. A house may pass differently depending on how it is owned.

For that reason, reviewing an estate plan should include account statements, deeds, insurance policies, and beneficiary forms. A document that says one thing may do little for an asset that passes under something else.

A trust may also be part of the plan. Whether one makes sense depends on the property and the purpose it is supposed to serve. Signing more documents is not automatically the same thing as having a more complete plan.

Plan for decisions during life

A financial power of attorney allows an agent to act within the authority granted by the document and applicable law. Some significant actions, including certain gifts and beneficiary changes, require specific authority under Iowa Code section 633B.201.

A health care power of attorney serves a different purpose. Iowa Code section 144B.1 describes a document authorizing someone to make health care decisions when the principal cannot do so under the statutory standard. Naming an executor in a will does not accomplish that job.

Make the plan usable

Imagine someone has carefully prepared documents, but the person they named has no idea where to find them. The legal instructions may exist, yet the family still begins by searching drawers and guessing which attorney to call.

An organized list of accounts, professional contacts, document locations, and the people chosen to serve can help. Sensitive information should be kept securely, with appropriate access arranged.

An estate plan should answer practical questions as well as legal ones. The documents matter, but so does whether the right people can find them and understand which responsibility belongs to whom.

Tyler ThompsonAuthor