Getting Started With Estate Planning
Updated: Aug 16
Action is important. Life happens, and you want to be prepared, and creating your estate planning documents is about caring for yourself and your loved ones, both during life and upon your passing.
It’s essential to be prepared and ensure you have the legal documents in place that can make a huge difference in a time of need.
Why Estate Planning is Essential
Estate planning is not only about ensuring your assets pass according to your wishes at your death but also ensuring that your affairs can be attended to in the event you are unable to act on your own behalf during life.
Creating legal documents now will:
Allow someone to legally assist you during your life, both for health care matters and financial matters
Inform your loved ones of who you want to act in different roles, during life, and upon your passing
Inform your loved ones of your various desires and wishes during life and upon your passing
Provide for asset management during your life
Coordinate the distribution of your assets upon your passing
Prevent delays, unintended consequences, and litigation in many ways!
The Basic Documents of an Estate Plan
Working on your estate plans now will pay off in the future. Postponing estate planning can result in uncertainty, confusion, and any number of family problems and conflicts in the event of your death or if you become unable to act on your own behalf during life. To avoid these complex consequences, I recommend those 18 years of age and older who have the necessary capacity to have the following three documents in place:
Last Will and Testament
The role of your Last Will and Testament ("Will") is to provide various provisions to address who should handle administering your estate for your beneficiaries, who should receive your personal and other property at death, who should act as guardians for your minor children and other matters.
Very basically, a Will has any number of provisions, depending on your specific goals and situation, and includes:
Bequests of personal property
Bequests of all other assets
Bequests to charities
Provisions relating to business interests
Guardian appointments for minor children
Creation of trusts for any number of reasons such as
To benefit minors or disabled individuals
To maintain control over assets upon your passing
To provide creditor protection for your beneficiaries
To provide protection for your beneficiaries if you have certain concerns you want to plan around, whether such concerns are about age, spending habits, potential divorce, drug addiction, or otherwise
Estate tax planning
Trustee appointments, if a trust is being created in your Will
Additional provisions concerning business interests, digital assets, simultaneous death provisions, and many others can be very helpful, depending on your circumstances
The idea is to make the Will work for your specific situation and with all your other estate planning documents, including those assets with beneficiary designations.
In the absence of a Will, upon your death, there is no roadmap for all to follow to provide who should act to administer your estate, who should receive assets passing through your estate, and any other matters affecting your estate. By creating a Will, you provide that roadmap. You can make the important decisions about who should handle administering your estate, who should receive what assets, guardianship appointments for minor children, and other matters. The more you can think through what could affect your estate upon your passing and create a Will that reflects what your situation requires, the better your loved ones will be.
Power of Attorney
A Power of Attorney ensures there is an agent who can handle certain financial matters for you in the event you're unable to act or simply desire help or need assistance for any number of reasons, including:
Cognitive inabilities or otherwise
I have seen too many instances where a Power of Attorney could have prevented a guardianship proceeding in Supreme Court, costing time, headache, and aggravation.
A Power of Attorney can include various provisions, such as:
Naming one or two primary agents who can act jointly or separately
Naming one or more successor agents who can act jointly or separately
Naming a monitor
Providing for compensation
Additional potential modifications to the statutory form can allow for great flexibility and robust planning opportunities for the future
For most individuals, New York State’s statutory Durable Power of Attorney is the appropriate set-up. This is a very powerful document and appropriate considerations must be given with only trustworthy individuals named as agents.
Health Care Proxy / Living Will
A Health Care Proxy is the document in which you name an agent and alternate agent to make medical decisions for you if you cannot make them or communicate them for yourself.
A Living Will is a statement of your healthcare wishes and is incorporated into your Health Care Proxy if desired.
With the Health Care Proxy / Living Will, you can:
Name an agent and alternate agents to make medical decisions on your behalf when you are unable to
Address end of life decision making
Address artificial nutrition and hydration wishes
Provide for funeral/burial arrangements
Provide for organ donations
Provide for religious considerations
A HIPAA release should also be included in the Health Care Proxy so the agent can access medical records and speak with physicians.
If you do not have a Health Care Proxy appointing a healthcare agent and there is a need for someone to make medical decisions on your behalf, New York state law will fill in the gaps with the Family Health Care Decision Act law. But, there can be delays in determining who the appropriate person should be at the time or fighting between family members.
What’s more, the person acting on your behalf, by default through this law, may not know your wishes or have different religious or other beliefs than you do regarding medical treatment. As well, this law is effective only if the individual is in a hospital or nursing home.
Much like with the absence of a Power of Attorney, the lack of a Health Care Proxy in your estate plan could necessitate the need for a guardianship proceeding through the appropriate court.
Beyond the basics
There are other options with estate planning but starting with the basics is certainly the way to get started!
Ready to get started?
I’m here to help. If you have any questions or are ready to begin the estate planning process, please contact me to schedule a consultation.