Why five, not just one
Most people think of estate planning as planning for death. But incapacity, being alive but unable to make decisions, is statistically more likely to affect you during your lifetime. A complete estate plan addresses both scenarios.
The five core documents divide into two groups: documents that control what happens at death (will, and trust if applicable), and documents that control what happens during incapacity (financial power of attorney, healthcare directive, HIPAA authorization).
1. Last Will & Testament
Your will directs who receives your assets, names an executor to administer your estate, and nominates a guardian for any minor children. Without one, state intestacy law decides, and that result may not match your wishes.
A will goes through probate, a court process. If avoiding probate is a priority, a revocable living trust does that work, with the will serving as a backup (see Document 2).
2. Revocable Living Trust (if applicable)
A trust is not required for everyone, but for anyone with real estate, significant assets, or a desire for privacy, it's the engine of an estate plan. Assets held in trust pass directly to beneficiaries without court involvement.
Trust-based plans always include a pour-over will as a companion document, it catches any assets not transferred into the trust and pours them in at death.
3. Financial Power of Attorney
A Financial (or Durable) Power of Attorney authorizes someone, your "agent", to manage your finances if you become incapacitated. Without one, a court must appoint a guardian of your estate, which is expensive and time-consuming.
"Durable" means the document remains effective even after you lose capacity. Non-durable powers of attorney terminate at incapacity, which defeats the purpose.
In Illinois, a Financial Power of Attorney must be signed before two witnesses and a notary to be effective under the Illinois Power of Attorney Act (755 ILCS 45/).
4. Healthcare Power of Attorney & Living Will
Your healthcare wishes are covered by two coordinated documents. The Healthcare Power of Attorney names a healthcare agent who can make medical decisions if you cannot. The Living Will (advance directive) states your own wishes about life-sustaining treatment in the event of a terminal condition.
Together, these are what allow your agent to talk to doctors, consent to or refuse treatment, and follow your stated end-of-life wishes. Without them, medical providers can only accept direction from legal next-of-kin, who may be someone you wouldn't have chosen.
5. HIPAA Authorization
The Health Insurance Portability and Accountability Act (HIPAA) restricts who can access your medical information. Even if you have a Healthcare Power of Attorney, some providers will not share information with your agent without a separate HIPAA authorization.
A standalone HIPAA release is short, typically one page, but prevents the frustrating situation where your healthcare agent is shut out by a privacy wall at a critical moment.
Putting it together
Not everyone needs all five documents in the same form. The right combination depends on your assets, family situation, and state. Estateur's quiz identifies which documents your situation calls for and drafts each one constrained by your state's specific requirements.