In the estate planning world, there is no such thing as a “cookie cutter" plan for any individual or family. Every situation is unique and needs a plan prepared especially for it. There are, however, a few essential documents which almost every person needs in order to cover their bases regardless of income, assets, family, or health status.
1. Last Will and Testament – A properly executed will allows you to
- appoint guardians for your minor children
- distribute your assets as you see fit instead of allowing the state to distribute them according to its laws
- appoint an individual or entity to administer your estate instead of letting your loved ones fight it out
- potentially save on estate taxes with a properly structured bypass trust
- pour over your remaining assets into a trust
Remember that a will has very specific execution instructions and it is crucial to follow them exactly. One simple mistake can completely invalidate a will as if it was never created. For this reason, it is highly recommended, and in most cases, indispensable that an attorney prepare and properly execute the last will and testament. For more detailed information, please read our article entitled “5 Reasons To Write a Will in New York"
2. Power of Attorney – A power of attorney allows a trusted individual or individuals, typically a spouse and/or child(ren), to carry out certain financial, legal, and business activities on your behalf. You, the principal, give them, the agents, certain powers as well as instructions. A power of attorney must be executed when you have capacity but can be used in the event that you become disabled or incapacitated if you specify so. This document allows your loved ones to handle your matters directly in the event of incapacity without going through a lengthy and expensive guardianship proceeding. New York recently introduced a new short form power of attorney which is much more complicated than the outgoing form. A New York attorney should be consulted prior to preparing one.
3. Health Care Proxy- A health care proxy is a person you designate to make health decisions on your behalf in the event that you are not able to on your own. The proxy would be under a duty to carry out your wishes in regards to medical decisions such as engaging in risky but potentially life saving treatments, DNI/DNR orders. Without such a document, New York’s Family Health Care Decisions Act would govern the order of who could make decisions. The act makes no provisions for who, among the various children, would be given the right to make decisions and can lead to legal challenges. A valid health care proxy prepared by an attorney will give you the peace of mind of knowing who will represent your best interests in the event that you can not make your own health care decisions. It also has the additional benefit of prompting you to discuss your wishes with your proxy.
While this is by no means an exhaustive list of estate planning documents, the foregoing are the foundation which every person, irrespective of wealth, needs to have in place while they are still healthy. It is highly recommended that an attorney familiar with all the relevant laws prepare and execute these vital documents. For a free consultation with an experienced attorney, please contact us today.