FACTORS TO CONSIDER WHEN PLANNING YOUR ESTATE
WHAT SHOULD MY GOALS BE WHEN PLANNING MY ESTATE?
Establishing a proper estate plan is one of the most important things you can do for yourself and your family during your lifetime. It is our belief that a carefully considered estate plan should allow you to accomplish each of the following goals:
Plan for yourself and your loved ones without losing control of your affairs.
Account for the possibility of your own disability.
Transfer your assets to your desired beneficiaries the way you want them to receive it and when you want them to receive it.
Save every tax dollar, professional fee and court cost that are legally possible to save.
Plan for future long term care needs and to prevent Medicaid estate recovery claims upon your passing.
WHAT FACTORS SHOULD I CONSIDER WHEN PLANNING MY ESTATE?
There is no “one size fits all” estate plan. A proper plan is one that is specifically tailored to meet your needs. It is the job of your estate planning attorney to personally sit down and discuss with you your goals and aspirations for yourself and your family so that the proper plan can be developed. Before making such an important decision, it is important that you understand the options that exist and how they apply to your specific situation. Proper planning goes well beyond merely deciding who receives your property when you pass away. There are many other factors to consider, such as:
LAST WILL AND TESTAMENT
A Last Will and Testament is a legal document that sets forth how a person wants his or her estate to be distributed upon his or her death. Many people choose to plan their estates by creating a Will. Doing so gives you control over how your assets are to be distributed upon your death. In a Will, an individual can implement estate tax planning, special needs planning and planning for minor beneficiaries.
It is important to remember, however, that property owned in trust, jointly held property and assets with beneficiary designations are not controlled by the terms of your Will.
Although creating a Will is an effective way to transfer assets upon death, there are some disadvantages. Probably the biggest disadvantage is the probate process and the time and costs associated with it. As such, since a Will guarantees that a person’s estate will go through the probate process, it may not be the preferred strategy in every situation.
A trust is a legal arrangement by which one party (called a “Trustee”) holds legal title to property for the benefit of another person (called a “beneficiary”). The person who creates the trust is called the “Grantor,” “Creator,” “Donor,” or “Trustmaker.” The rules or instructions under which the Trustee operates are set out in the trust document itself.
Simply put, a trust is a set of instructions telling the Trustee how to manage property that the trust owns for the benefit of the beneficiary.
SPECIAL NEEDS PLANNING
Loved ones of an individual with special needs must be sure that assets are left to such an individual in a manner which avoids disqualification from receiving government benefits, such as Medicaid and SSI.
This is often done by creating a supplemental needs trust. The purpose of a supplemental needs trust is to provide for the continuing care of a disabled individual without causing the individual to lose necessary government benefits. Assets held by a properly drafted supplemental needs trust may be used for the benefit of the trust beneficiary for his or her needs above and beyond what is received through government programs. Examples of such needs often include education, hobbies, clothing, vacations, household goods, etc.
DURABLE POWER OF ATTORNEY
An essential part of any estate plan is the durable power of attorney. No matter how you decide to plan, a comprehensive durable power of attorney should be executed appointing one or more family members or trusted friends as your agent(s).
Your agent will have the power to make financial decisions on your behalf, including the ability to implement estate and Medicaid planning, make gifts and to handle tax matters.
A comprehensive durable power of attorney drafted by an attorney specializing in elder law matters is a critical part of your plan to protect and preserve your assets. In addition, this planning tool can be crucial in avoiding a guardianship proceeding which can be time consuming and costly.
HEALTH CARE DECISION MAKING
As a part of any estate plan, you should also consider executing the following health care decision making documents:
Health Care Proxy– A health care proxy is a document that allows you to appoint another person to make health care decisions on your behalf if you become unable to make those decisions for yourself.
Living Will– A living will is a document that allows you to express your desires regarding life sustaining treatment in the event there is no reasonable prospect of recovery. It is an important document to provide guidance to your loved ones in the event they are ever faced with making such a difficult decision on your behalf.
PROBATE AND ESTATE ADMINISTRATION
Trying to navigate the probate process or otherwise administer an estate while coping with the loss of a loved one can be extraordinarily difficult. Our staff is here to ease the burden facing the family and friends of a loved one who has passed away.
For decedents with a Last Will and Testament, the responsibilities of the executor named in the Will can be overwhelming. These responsibilities include:
Preparing and submitting necessary court documents.
Paying debts and expenses.
Following the directions of the Will to make distributions to beneficiaries.
Preparing inventories and accountings.
Preparing and filing necessary tax returns
For decedents with no Will, rather than probate, the process is called an administration proceeding. An administration proceeding is similar to probate and the administrator of the estate has the same responsibilities as an executor. In an administration, however, distributions must be made in accordance with New York State law.
Whether a probate or administration proceeding is needed, our firm is here to assist you throughout the entire process.