Admittedly, talking about estate planning can be stressful and down-right distasteful. The conversation revolves around your future disability and your death. But the conversation, and then the planning and doing, is important. After your plan is in place, you will have a sense of comfort that you are in control of what will happen in the event of your future disability, and that your assets will pass as you intend in the event of your death.
Note that as your life, health, finances and goals change (and the tax laws change), your plan might need another conversation. But that is another chapter.
At Rosenthal & Markowitz, LLP, we pride ourselves that we are caring and compassionate when working with you in planning for what might lie ahead.
Estate Planning Tools
There are several types of estate planning documents you may want to have. Each individual has different needs. Married couples might have different needs from each other. A married couple with a blended family has very different needs. Fortunately estate planning tools come in all sizes and flavors and can be tailored to meet your needs. You may want to have one or all of the following.
Planning Documents to be Used While You are Alive:
A powers of attorney. The function of a power of attorney is for you to name an agent to assist you with your finances (for example, attending a closing to buy or sell your residence, dealing with social security, hiring health aides, opening or closing bank accounts, paying your bills, making gifts on your behalf). The power of attorney is only effective while you are alive. It dies with you. The agent can start work as soon as you want the agent to – even if you are competent. Basically, a power of attorney gives your agent the authority to make financial decisions for you now and if you are incapacitated or otherwise unable to make them for yourself. A complete power of attorney will avoid the need for a court-ordered guardianship. The form must be the current form and must be state-specific. It must be signed in accordance with very specific rules. Note that there may be forms available on-line. I cannot urge you strongly enough to avoid downloading forms as any form downloaded may not be current, may not be correct for NYS and is not customized for you.
A health care proxy. A health care proxy is also a NYS specific form in which you name a person, called a proxy, to make medical decisions for you. The proxy can only obtain your medical information and make decisions if you are not competent to do so for yourself.
A living will. A living will is a different kind of medical directive. In the living will, you get to state what kind of care you want, or don’t want, if you are not competent to do so for yourself.
Planning Documents to be Used After Your Death
A Will. It is your opportunity to get the last word. It gives you the opportunity to say exactly how you want your assets distributed and who you want to be in charge of settling your estate. To be a valid Will (so that it can be admitted to probate), the Will must be in writing and signed in a very particular statutory way. When you die, if probate is necessary, the Will is submitted to the Surrogate’s Court. If the Court admits the Will to probate, your Executor is charged with making sure that your Estate is settled properly and completely and that your instructions are carried out.
Planning Documents That Might Be Useful While You are Alive and After Your Death:
Trusts. There are many types of Trusts each with its own function and benefits. There is no one-size-fits all Trust. A trust might be written into a Will (called a testamentary trust) and so is not effective until after you die and the Will is accepted for probate. Or, a trust can be created while you are alive (called a lifetime trust). A lifetime trust might be revocable (amendable) or irrevocable depending upon your planning goals. A lifetime trust might be funded while you are alive, or it might be funded only after your death. A lifetime trust could be created for your own beneficiary, or for the benefit of another person. If you transfer your property into the Trust while you are still alive, then the Trust becomes the owner of the assets you put into the Trust. The Trust Agreement does not go through probate (only a Will goes to probate). When you die, the assets owned by the Trust pass to those you have named as beneficiaries. The Trust Agreement might permit you to control the terms of the Trust and trust assets while you are alive or you might give control and management to a third-person.
Here are just a few examples of how a trust might be used:
- A Trust can be established for the benefit of an intended beneficiary who you believe may not yet be old enough or responsible enough to manage his or her own assets, or might have present or future creditors, or might have a present or future spouse problem. The trustee is a manager who can control the use and flow of assets to the beneficiary as and if needed.
- A trust can be established to care for a special needs child (or adult).
- You might create and fund a trust while you are alive if you want to do Medicaid planning, so that the trust assets might be unavailable as a resource or for Medicaid recovery after your death.
- You might create and fund a trust while you are alive if you want to do estate-tax planning to reduce the size of your estate and potentially reduce estate taxes.
I suggest everybody fill out their digital inventory so that you’ve got a written record of all of the places that somebody might need to access, or you might need to access and you just need to remember what your user names and passwords are.
Also, if somebody needed to get access to my information to help me, even if I’m alive and competent, somebody might need to help me. I might be traveling. I might say to my daughter, “Go into my account and order me a whatever it is,” and so she needs access to my accounts.
And then, of course, there’s the worst case scenario, which is after I die somebody’s going to have to be able to access my asset, debt, subscription information, maybe my Facebook page, my LinkedIn page, because somebody’s going to have to manage and clean up after me, collect my assets for my estate, pay my bills and make distribution. And if somebody doesn’t know where my assets are, and what they are, and can’t access them, no one’s ever going to be able to spread my wealth, so to speak.
Rosenthal & Markowitz, LLP, stands ready, willing and able to assist you in your Estate Planning needs. Contact us to schedule a consultation.