What Estate Documents are Effective and When
When planning your estate documents, it’s important to understand when each document is effective and used within your plan. In general, there are 5 life periods that determine when documents are effective or not:
- During Life, Capable: This period is likely where you are if you’re reading this article. You’re not dead yet, and you have the ability to made decisions.
- During Life, Incapacitated: This period describes when you are alive but unable to make decisions.
- During Life, End of Life: There is a special period when you are deciding end of life treatments.
- At Death Immediate Settlement: This is the period following death through settling of the estate which is typically 9 months but can last longer.
- Post-Death Long Term: Describes the period following the closure of the estate.
Durable Power of Attorney (Attorney in Fact):
- During Life, Capable: Not active; the principal is capable.
- During Life, Incapacitated: Active; powers are granted when the principal is deemed incapacitated.
- During Life, End of Life: Active; continues through end-of-life decisions if the principal is incapacitated.
- At Death, Immediate Settlement: Not active; powers cease upon the principal’s death.
- At Death, Long-Term: Not active.
Springing Power of Attorney (Attorney in Fact):
- During Life, Capable: Not active; designed to spring into action under specific conditions, typically incapacitation.
- During Life, Incapacitated: Active; only becomes active upon the incapacitation of the principal.
- During Life, End of Life: Active if specified and the principal is incapacitated.
- At Death, Immediate Settlement: Not active.
- At Death, Long-Term: Not active.
Healthcare Directive (Healthcare Agent):
- During Life, Capable: Not active; the principal is capable.
- During Life, Incapacitated: Active; healthcare agent makes medical decisions if the principal is incapacitated.
- During Life, End of Life: Active; healthcare agent can make end-of-life medical decisions.
- At Death, Immediate Settlement: Not active.
- At Death, Long-Term: Not active.
Living Will (Healthcare Agent):
- During Life, Capable: Not active.
- During Life, Incapacitated: Active; directs the provision, withholding, or withdrawal of life-sustaining treatment.
- During Life, End of Life: Active; specifically governs end-of-life decisions.
- At Death, Immediate Settlement: Not active.
- At Death, Long-Term: Not active.
Last Will and Testament (Executor):
- During Life, Capable: Not active.
- During Life, Incapacitated: Not active.
- During Life, End of Life: Not active.
- At Death, Immediate Settlement: Active; the executor administers the estate as per the will.
- At Death, Long-Term: Active; continues until all aspects of the will are settled and the estate is closed.
Trust (Trustee):
- During Life, Capable: Active if the trust is irrevocable or if set by the terms.
- During Life, Incapacitated: Active; manages trust according to the trust documents, potentially providing for the incapacitated grantor.
- During Life, End of Life: Active; may manage and distribute assets as dictated by the trust.
- At Death, Immediate Settlement: Active; continues to manage or distribute assets per the trust instructions.
- At Death, Long-Term: Active; continues to operate according to the trust’s terms, which may extend well beyond the grantor’s death.