Three Estate Planning Tools Everyone Should Have
Often times people wait until the last minute to see an Estate Planning Attorney. Some times it is too late! Having an estate plan is not just about having a will but about documents that can help your family make medical and financial decisions for you when you can't do it for yourself.
Create a WillA Will is a documents that not only directs who should get your property after you die but it can also nominate guardians for your children, create trusts for disabled or other beneficiaries and most importantly, it lets you leave someone OUT of your will!
Under New York Law though, you cannot disinherit a spouse. If you do, your spouse is still entitled to 1/3 of your estate under the "right of election" rules. If your spouse wants to, they can waive the right of election however.
You must be over the age of 18 and be of sound mind when creating a will. There must be at least two witnesses both of whom either witnessed the signing or the testator (person creating the will) can acknowledge his signature in front of each witness. This must be completed within 30 days of the testator's signature.
What property goes through a Will? Any of your titled assets e.g., bank accounts, real property; that is NOT in a trust, NOT jointly held or if there is NOT a beneficiary will flow through your Will or your "estate." Once you die your Will is filed by the Executor of your estate in the county Surrogate's Court where you passed away and the court then issues "letters testamentary." The Executor can now open an estate bank account, pay all your bills and, after a seven month statutory wait period, make distributions according to the will.
If you die without a will, the law provides who will get your property under New York Intestacy Law and an administration must be filed instead. The problem with this is that people who you may not have wanted to get your property just may! So if you don't have a will, do one soon! If you do have one, have it reviewed every three years or so by a qualified estate planning attorney. NEVER use an online source "LEGAL ZOOM" or print one from the internet. There is no guarantee these documents will be valid in a court of law after you die.
Power of AttorneyA Power of Attorney is a document that allow a principal to name an agent to act on his or her behalf. In other words someone you appoint can sign your name on a document at your direction or in your best interests. If the Power of Attorney is "durable" then it never expires even if you lose mental capacity. This is a must have document for a person of any age because you never know what life with throw at you. Without this document in place, your loved one will have to file for a guardianship in the Supreme Court in your local county and that is expensive!
Newer Powers of Attorney, i.e., those created after October 2009 have what is called a "gift rider." This is a very important part of the new documents especially for Medicaid planning. Without a gift rider, one cannot transfer more than $500 out of your name which is a bad thing if you need to move money out of your name to be eligible for Medicaid! Your lawyer should be able to explain every aspect of this document to allow you to make educated decisions about your Power of Attorney.
Having a Power of Attorney in place will allow a person you name to transfer assets out of your name to make you eligible for government benefits like Medicaid as well. Again, a MUST HAVE document for people of all ages. This document should only be prepared by an experienced attorney.
Health Care ProxyA Health Care Proxy is another MUST HAVE document. This document allows someone you name to make medical decisions on your behalf in the event that you cannot make those decisions for yourself. The document does not expire. You may only have one Health Care Proxy at a time and it must be witnessed by two people. An experienced attorney can create this document once so that you do not have to complete the document everytime you have a surgery or procedure.