Estate plan glossary: 10 estate planning definitions to know

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Will? Living will? Revocable living trust? Learn the definitions of these and other important terms in our glossary for estate planning documents.

Confused about estate planning documents? Help is here! Reviewing this list of 10 definitions can be a great way to better familiarize yourself with the role or roles each plays when it comes to determining what will happen if you become incapacitated or when you pass away.

  1. Current net worth statement. This is a list of all of your assets and liabilities and what they’re worth. This list sometimes also includes how various assets are titled. Keep this document updated so that it reflects current information about all of your accounts, real estate, liabilities, and other items. This document can save your successors and your advisors valuable time figuring out what assets need attention in your estate.
  2. Durable power of attorney (POA) for health care. This POA appoints an agent to make medical decisions for you if you can’t make them yourself. Keep the signed original in a secure place that’s known to people such as a spouse, partner, agent, or close family members who will need access to it. Ask your physician if they will keep a digital copy on file in their office.
  3. Health Insurance Portability and Accountability Act (HIPAA) release authorization. As a stand-alone document or as part of other documents, such as a durable POA for health care, this privacy-related document lets you explicitly declare who should have access to your important medical information. Keep the signed original in a secure place, that’s known to people such as a spouse, partner or close family members who will need access to it.
  4. List of professional advisors. This list includes contact information for important advisors, such as your financial advisor, attorney, CPA, insurance agents, and doctors.
  5. Living will. This document expresses your wishes about prolonging your life in cases like a terminal illness or if you’re permanently incapacitated. Keep the signed original in a secure place, that’s known to people such as a spouse, partner or close family members who will need access to it.
  6. Medical condition record. This is an informal way to let your trusted agent know about your health status when there’s a need.
  7. Power of attorney for financial matters. This names someone you trust to help manage your financial affairs. It could be structured to become effective at the time you sign it or could be triggered to take effect if you become incapacitated. Keep the signed original in a secure place that’s known to people such as a spouse, partner or close family members who will need access to it.
  8. Revocable living trust. This document directs how assets will transfer to your beneficiaries upon death. The goal is to fund it during your lifetime so your successor trustee can also manage trust assets during incapacity, as well. A funded revocable trust can often simplify the estate settlement process by allowing your estate to avoid the probate process. Keep the signed original in a secure place, that’s known to people such as your successor trustee who will need access to it.
  9. Will. This is an important set of instructions that distributes assets that you own individually (with no beneficiary designation) upon death. It also includes who you’re designating as a guardian for minor children and appoints an executor (also referred to as a personal representative) to administer your estate after you pass away. Keep the signed original in a secure place, that’s known to people such as an executor or close family members who will need access to it.
  10. A guide to all of the above. This can be a digital file or physical document that you share with the people you trust. It should catalog all the estate planning documents you’ve prepared and their locations so that they can be found easily. You may also wish to keep a digital copy of all of the above items.