Estate Planning

It is never too early to start planning for the future. Estate planning is the process of managing your estate and assets, who can make decisions on your behalf if you become temporarily or permanently incapacitated, and how your assets will be distributed when you pass on.

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Estate planning involves several legal devices, including wills, trusts, and other advance directives such as health care proxies and financial power of attorney.

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Wills and Trusts

 

A will, also referred to as a last will and testament, is a legal document that names your executor and plans to settle debts and distribute assets to beneficiaries upon your death. The laws governing wills are very complex, and a will should be planned and executed in compliance with all local laws. If a will is not created or managed properly, there may be issues getting through probate. An improperly managed will may lead to an increased chance that your assets will not be distributed as you desired.

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Trusts are an estate planning tool that directs the distribution of assets after death. A trust may be used to provide for the distribution of funds to a minor child or a developmentally disabled child. A special needs trust is available to help care for a severely developmentally disabled child or adult.

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Trusts are also used for wealth management and may even provide assets or funds to be distributed over several generations. Multi-generational planning is often referred to as Dynasty Planning.

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Trusts also allow you to set conditions for how and when heirs may receive an inheritance. With a trust, assets may even be passed before you die. Placing valuable assets such as your home in trust can help avoid probate issues, save on estate taxes, and protect your home from certain creditors, such as Medicaid, if you require long-term care in your later years.

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Advance Directives such as Living Wills, Health Care Proxies, and Power of Attorney

 

Advance directives are legal documents that help you while you are still alive. Advance directives may grant others the ability to make decisions on your behalf permanently, temporarily, or under specific conditions.

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A living will is an advance directive that gives guidance to health care providers specifying what actions may and may not be taken for their health such as whether extraordinary life-saving measures may be taken.

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A health care proxy is a document with which a patient appoints an agent to legally make healthcare decisions on their behalf if they have become incapacitated. Once a health care proxy is made effective, the person assigned decision-making abilities may continue to make decisions until the patient is once again legally competent to make their own decisions, or until the patient dies. A person named in a health care proxy may not overrule decisions made by the patient in a living will or made a stipulation of making the health care proxy effective. Even if asked to override a decision in a living will, health care professionals are not legally able to do so, even if asked by the person named in the health care proxy.

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A Power of Attorney, like a health care proxy, gives authority to an agent to make decisions on behalf of a person who has become incapacitated or is not legally competent to make decisions. A power of attorney can be used to authorize a person to make legal, financial or business decisions.

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In many cases, a power of attorney may be granted to a person to assist with legal processes, such as signing documents for a real estate closing if the grantor is physically unavailable. These powers of attorney are valid for a period of time or until the grantor becomes incapacitated. The grantor may specify that a power of attorney be valid even if they become incapacitated. This is called a power of attorney with durable provisions, or durable power of attorney. A durable power of attorney may remain in effect until the grantor dies.

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All Adults 18 years of age and older should have Advance Directives in place

 

The age of majority is 18 in 49 states and Washington DC, including New York. Nebraska's age of majority is 19. Advancing from the status of a minor to an adult means that 18-year-olds are legally responsible for making their own decisions as it pertains to their health and finances.

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There are aspects of the law where the age of majority is considered to be 21. 21 is the age that an adult may legally purchase and consume alcohol. The Uniform Transfers to Minors Act (UTMA) allows a minor to receive gifts—such as money, patents, royalties, real estate, and fine art, without the aid of a guardian or trustee until the age of 21 in New York.

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For parents of 18-year-old adults, it can be a difficult transition from making all of your child's medical and financial decisions to not having a legal say in your child's affairs.

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As your child approaches the age of 18, it is important to speak with them about the responsibility of making their own decisions. Once a child turns 18, parents no longer have the ability to make many health and financial related decisions, even if the child becomes incapacitated. Health care proxies and a power of attorney are important directives for any adult to have.

 

These documents will allow the person named in the documents to speak to doctors, banks, or even authorities such as law enforcement under conditions stipulated in the advance directives. As with a senior citizen, these documents can be permanent or temporary based on circumstances and may include stipulations that cannot be overruled.

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Contact Kamini Fox to Discuss your Estate Plans

 

Whether you are just starting out on your own or you are ready for retirement, it is important to have your estate plans and advance directives in order. It is also important to know that these documents are all living documents, meaning that you may make changes to any part of these documents whenever you wish. Your situation changes as you go through life and your estate plans should reflect those changes. Call Kamini Fox, PLLC at 516-493-9920 for a free consultation.