Take Control of Your Estate Plan with 4 Essential Documents

Chelsea Manocchi

Lead, Estate Planning Strategist


Find out which four documents we recommend for creating the foundation of an effective estate plan and how to execute your plan.

Couple reviewing estate planning documents

When you establish an estate plan, you are taking control of choosing who will inherit your assets, whether it’s family, friends, or charities of choice. As a result, it can help mitigate family disagreements about money after your death while ensuring your intentions get fulfilled. And, while you’re alive, you can make it easier for loved ones to act on your behalf for financial and medical decisions.

Planning in advance with foundational documents can also minimize the impact of state and federal estate taxes upon distribution, giving your loved ones more of your hard-earned estate. And an estate plan with a living trust helps to avoid probate, which is the distribution of your assets under court supervision. Probate can last months or years and take between 5% to 20% of an estate’s assets.1

Whether you choose to put your plan together with an attorney’s help or without, it’s important that you direct your loved ones to where the estate planning documents are kept. This is particularly crucial if you are going to grant them the ability to step in and fulfill your wishes if you become incapacitated. Along with these documents, you should consider keeping instructions for your funeral or memorial wishes to allow for quick access. Our Family Records Workbook is an efficient way to provide this information to loved ones.

There are four essential documents that we recommend as the foundation of an effective estate plan.

  1. Revocable living trust with a pour-over will, or a last will and testament:

A revocable living trust directs the transfer of your assets upon your passing, while helping avoid probate. Money, personal property, and investments are types of assets placed in a revocable living trust, and they are used and managed by you, as the trustee, while you’re alive. You can also appoint a trustee to manage your assets if you become incapacitated. The pour-over will is for protecting assets that haven’t been properly transferred into the revocable living trust, either accidentally or purposefully. A revocable living trust is a useful tool for planning various levels of control for your assets, such as teaching children financial responsibility by giving portions of the inheritance at different ages or stages. There is no minimum of assets required to establish a trust, though there can be costs involved.

A last will and testament only becomes effective upon your death. On its own, a will can designate who you want to inherit your assets, but it will still go into probate. You designate an executor to ensure your wishes are carried out per the will. Estate taxes are unavoidable on assets distributed upon your death. With a will, you can designate a guardian for minor children and pets. For a straightforward solution, a will can suffice but may provide less control.

  1. Financial power of attorney:

This is an estate planning tool that gives someone you trust the ability to make day-to-day financial decisions for you. There are different legal documents for executing a financial power of attorney (POA) depending on the level of responsibility and duration of power you plan to grant. For instance, a limited POA can have specific beginning and end dates, plus it can state whether you want an individual to have the ability to withdraw money from your accounts or not. A durable financial POA allows the individual to make financial decisions if you are unable to do so yourself. Financial POAs are only in effect up until you pass away. You may be able to get a financial POA for free online, but states have different requirements for considering the document valid, such as witnesses, notarization, or filing with government agencies.

  1. Healthcare power of attorney and living will (advance care directive):

The healthcare (or medical) POA document and living will document are separate but important to have together. The healthcare POA is for designating someone to make decisions for you if you are incapacitated. The living will specifies your wishes for medical treatments or decisions of care typically near end of life, e.g., inserting feeding tubes. Together, the two documents are sometimes referred to as an advance care directive. Like financial POAs, healthcare POAs can be obtained easily but states have different requirements for considering it valid.

  1. HIPAA authorization:

Per the Health Insurance Portability and Accountability Act (HIPAA), your protected health information can’t be viewed by or released to an individual without your consent. Your family members, unless authorized, cannot even discuss your medical condition with your physician. HIPAA authorization forms give whomever you choose permission to access your private medical information from your provider(s), which helps with making medical decisions if you are incapacitated. The authorization also helps your management of medical bills by your designee, if needed. Because the nature of the authorization is quite sensitive, certain information may be required to be included in a HIPAA authorization form, such as the purpose of disclosing the information and the relationship to the patient. Medical providers have their own forms and universal forms are easily found online (note that some states have their own forms.)

How to establish an estate plan

Since your personal circumstances — finances, desires, location and community, values and beliefs — are likely different from someone else’s, the help of estate planning professionals can be vital. One form, document, or plan does not fit all. And, because there are also important decisions being made about your legacy, you may want to involve a neutral or third party. The assets you’ve accumulated in your lifetime are worth protecting, as are your loved ones. At the very least, though, you can gather and fill out all these documents on your own as the foundation of an estate plan. At Mercer Advisors, we offer estate planning services through in-house strategists who collaborate with your wealth advisor, and tax and trust specialists, to create a holistic financial plan for help with protecting your wealth and your loved ones.

If you are not a Mercer Advisors client and would like to know more about establishing and executing an effective estate plan, and how it could fit into your total wealth management, let’s talk.

1.“Everything You need to Know About Probate,” U.S. News, Aug. 30, 2022.

Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.

Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning document preparation and other legal advice is provided through select third parties unaffiliated to Mercer Advisors.

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