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Important Documents All Clients Should Have in Place


Important Documents All Clients Should Have in Place

Most people pride themselves on managing their lives and working hard so that they and their children can have better lives. They’re are busy people and choose to rely on professional financial advisors to help increase the value of their assets. ‘Let your money work for you’ says it all, right? So while the money is working for our clients, there are some major questions to ask on the client’s behalf and the all-important accompanying documentation.

What exactly are my client’s planning needs?

The planning community has had to rethink ideas on planning for aging clients. Planning is no longer based on age alone but the focus has changed to stage of life. Think – Janet Jackson… having her first child at 50. Individuals are commonly having children later in life, so schooling and college savings may actually be a priority for an “older-ish” client.

Individuals are also more concerned with aging in place, so paying a mortgage or having a reverse mortgage may be important for aging clients who are upgrading instead of downgrading their homes.

More traditional clients may be still be focused on investing for retirement – now retiring at a younger age – or they may focus planning on providing for future generations.

The client’s focus could be on any of these scenarios, but when a serious illness occurs it impacts their planning needs and changes the focus toward paying for long term care.

Generally what are the basic documents clients should have in place?

Last Will and Testament: It is startling that as many as half of all adults do not have this most fundamental document in place when they die. Think – Prince….$300 million in assets with no Will?

Durable Financial Power of Attorney (DFPOA): While a Will determines what happens to the estate after death, a DFPOA controls how business and finances are handled while the client is alive – either at their direction or when they become incapacitated.

Durable Advance Directive for Health Care (DADHC): Is similar to the DFPOA in purpose, but its focus is health care decision making. This is the most personal document as it directs the client’s agent as to the physical care and the quality of life they desire.

Are there other documents for clients to consider having in place?

Health Records — Courtesy of the implementation of the Health Insurance Portability and Accountability Act (HIPAA) and the interpretation of the law by doctors, hospitals and other health care providers, it is difficult for family members to obtain information or medical records unless the provider has a signed HIPAA Authorization and Consent in hand.

Deeds — With or without Right of Survivorship depending on the desired purpose of the document and the planning needs dictated by the client’s circumstances.

Trusts — These come in many forms to achieve many different purposes depending on the desired purpose of the document according to the planning needs dictated by the circumstances surrounding the client’s situation. They are either Revocable or Irrevocable and might be called Spendthrift Trust; Settlement Protection Trust; Special Needs Trust – First Party or Third Party; Irrevocable Life Insurance Trust; Education Trust; or Bypass Trust, to name a few.

While this is obviously not an exhaustive list of documents that may benefit a client, it’s the key ones that clients ask about most often. And when it comes to documents, it isn’t all in the name:

  • For example, even if the Power of Attorney has “Durable” in the name it is not a Durable Power of Attorney unless the document contains the specific language to make it Durable.
  • A Last Will and Testament has state-specific legal requirements it must meet in order to be a legally enforceable document in that jurisdiction.
  • A Special Needs Trust must include required language, without which the client’s state Medicaid Agency will not approve the document for use as a Special Needs Trust.


When it comes to documents, their creation, intended purpose, and use, it’s best to defer to an experienced, knowledgeable practitioner to ensure the client reaches their intended planning goal.

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