Summary: This article discusses and explains the aspects of establishing a typical estate plan, and is directed to residents of New York.
How Do You Know if You Need Estate Planning?
If you are a human being who owns stuff, estate planning pertains to you. This goes double for an individual with kids and/or other dependents who hopes to one day leave their money, possessions, or property in the right hands. Estate planning is a way for you to maintain control of your stuff after you die or become no longer able to make decisions about your assets and affairs. Without estate planning, your property and money will be distributed to your next of kin according to New York State law. With a well planned estate, you are in charge of how you would like your property and money distributed.
What Do You Need in Your Estate Plan?
A general estate plan consists of a Will, Power of Attorney, Living Will, Healthcare Proxy, and in some cases a Trust. Each situation is unique so not every document will apply to everyone. Below are a few basics.
A Will is essential in any estate planning. This document must be drafted and executed (signed) properly in order to be valid in New York. This document is created according to your wishes and serves to determine how your property will be distributed after you pass away. A proper estate planning lawyer will make sure the Will is composed and signed correctly, including:
Making sure you understand exactly what you are signing;
Clearly naming the beneficiaries to avoid any confusion of where you want your property/money to go;
Overseeing the proper signing of the Will; and
Overseeing the proper signing and attestation of two uninterested witnesses.
Although we’ve just outlined the basics, New York law can at times be tricky to navigate. Contact an Estate Planning Lawyer to make sure your Will is correct and all New York specifics are properly followed.
Power of Attorney:
A Power of Attorney is a document that allows for another person of your choosing to make decisions with respect to specific financial matters decided by you, or all legal matters in the event that you are unable to choose due to injury and/or sickness. Keep in mind, a Power of Attorney is no longer in effect after you die. More importantly, if the Power of Attorney is not “durable,” the power ends in the event that you become incapacitated, meaning you are deemed unable to make decisions yourself. This is a very important part of any estate planning.
A Living Will is different from your Will (discussed above), as a Living Will is used to determine your wishes regarding medical treatment in the event that you are unable to communicate them due to injury or sickness. This document advises a doctor or physician of your wishes with regards to medical treatment. For example, if you wouldn't want to be kept alive surviving only by the support of machines, you would include this in your Living Will instructions.
A Healthcare Proxy is a document which allows for another person to make medical decision for you in the event that you are unable to. It is important, as any decent estate planning lawyer would tell you, that you also include HIPAA authority documents with your Healthcare Proxy. HIPAA is a set of rules that provides security with respect to medical records privacy. You would likely want the person you choose as your healthcare proxy to have access to this if needed.
This is a topic that can easily take up my next 5 articles, but in the interest of being brief, I will give you a basic overview.
A Trust is a legal document into which a person (named the “Trustor” or “Grantor”) places certain property or money to preserve it for a future beneficiary. A “Trustee” is a person given certain authority from the Trustor to maintain the property/money inside the Trust. This person or entity abides by the Trust rules in investing the Trust and/or distributing the Trust to your chosen beneficiaries. The Trustor and Trustee can be the same person.
The fundamental idea behind a Trust is to make sure your property/money goes to the right beneficiary when the Trust ends. Estate Planning that includes a Trust provides you with a lot more flexibility and control over how your assets will be distributed or used. Because there are many different kinds of Trusts, which all have varying pros and cons and serve many different purposes (tax benefits, supplemental needs, medical expenses), it is advisable to hire an estate planning lawyer to determine the most effective course of action to establish and best achieve your personal needs.
How Do I Get Started?
Estate planning is different for everyone. If you are interested in putting together your estate plan, or just figuring out your estate planning needs, feel free to contact Beau Taylor Law, PLLC for a free consultation to discuss your unique situation.