Planning for Life’s Journey
Estate Planning – Wills and Trusts Frequently Asked Questions
Why Do I Need a Will?
Having a properly executed Last Will and Testament (Will) allows you to direct who receives your assets, who will be appointed guardian for your minor children, and who will serve as Executor, who is responsible for the administration and distribution of your estate. Having a Will gives you the control of having made the decisions, as opposed to leaving the laws of New York in charge of making decisions. Some persons do not want a Will, and instead choose a Trust or other testamentary substitutes to distribute wealth after death. However, even those hoping to avoid the use of a Will and the Will’s admission to the Court in the probate process should have, as a safety precaution, a simple Will on file.
What Happens If I Die Without a Will?
In New York State, if you die without a Will, the “laws of intestacy” govern the distribution of your property to your nearest relatives. If you have a spouse and children, the spouse will receive $50,000, and then the spouse and children will split the rest equally. If there is only a spouse, the spouse will inherit everything. If there is no spouse, the children will inherit everything equally. For a person without a spouse and/or children, the estate will pass to the decedent’s parents. The law continues to more distant relatives if there are children, spouse and parents living. There is even a mechanism for distribution if there are no relatives – a provision in the law that permits your assets to escheat (pass) to New York State.
What Is a Power of Attorney and Why Do I Need It?
A Power of Attorney is a legal document that authorizes another person known as your “Agent” to make legal and financial decisions on your behalf. It may be limited to a specific time period or can be for your lifetime. Similarly it can be tailored to cover specific tasks or it can grant very broad powers to your Agent.
There are two primary persons involved in a Power of Attorney:the Principal, and the Agent. Under New York law, it is permissible to name more than one Agent. Multiple Agents may be authorized to act independently or whether they must act together. A Successor Agent should also be named the event the primary Agent is unable to act.
A Power of Attorney needs to be carefully customized. One of the greatest errors made is relying upon a standardized form, or relying upon a general power of attorney prepared by someone other than an Elder Law Practitioner.
What Is a Health Care Proxy?
A Health Care Proxy is a legal document authorizing another person, known as your “Health Care Agent,” to make medical decisions on your behalf in the event that you are unable to do so for yourself. The Health Care Proxy would also authorize your Health Care Agent to access your confidential medical records.
The authority of the Health Care Agent only begins when the principal – you – are unable to make medical decisions for yourself. Every time you sign a new Health Care Proxy, you revoke prior ones.
What Is a Living Will?
A Living Will is a document which acts in conjunction with your Health Care Proxy to provide instructions to your Health Care Agent and your health care providers, such as your doctor or hospital, concerning treatments you may or may not want to receive in the event that you are unable to express your wishes. You may tailor your Living Will in any manner you desire to accurately reflect your wishes.
What Is MOLST?
MOLST is the acronym for Medical Orders for Life Sustaining Treatment. This bright pink form is a standing medical order from a doctor that contains your decisions regarding life sustaining treatment. It encompasses the traditional DNR (Do Not Resuscitate) issues, such as cardio pulmonary resuscitation, but also contains many other end of life medical treatments. A health care provider completes the form in consultation with you or your Health Care Agent, and a MOLST form can include instructions to accept all life sustaining treatments, no life sustaining treatments, or just some treatments. It is recommended for those with a terminal condition or with a life expectancy prognosis of one year or less.
What Is a Testamentary Trust?
A Testamentary Trust is specified in the language of a Last Will and Testament and goes into effect upon an individual’s death. This type of trust is typically used when someone would like to leave assets to a beneficiary, but doesn’t want the beneficiary to receive those assets until a specified time. An example might be if there are minor children who are the beneficiaries of an estate and the parent(s) prefer the child(ren) does not receive the asset outright. The parent can specify the assets are used for the child(ren)’s care until they reach a particular age, or even stagger the balance to the child(ren) upon certain age milestones. Another example may be if a child has a disability or poor spending habits and the parent chooses to safeguard the inheritance by creating a Testamentary Trust.
What Is a Revocable Living Trust and Why Would I Want to Include it in my Estate Plan?
A revocable living trust is a type of legal arrangement in which an individual, known as the grantor, transfers ownership of their assets to a trust that they create and control during their lifetime. The grantor typically serves as the initial trustee of the trust and can continue to manage the assets in the trust while they are alive and able to do so.
The revocable living trust is “revocable” because the grantor retains the ability to modify or revoke the trust during their lifetime. This flexibility makes it a popular estate planning tool for individuals who want to maintain control over their assets while ensuring that their wishes are carried out after their death.
One of the primary benefits of a revocable living trust is that it can help to avoid probate, which is the legal process of administering a person’s estate after their death. By placing assets in the trust, they are no longer considered part of the grantor’s probate estate and can be distributed to beneficiaries without the need for court supervision.
In addition to avoiding probate, a revocable living trust can also help to minimize estate taxes, maintain privacy, and provide for the management of assets if the grantor becomes incapacitated.
It’s important to note that while a revocable living trust can be a useful estate planning tool, it may not be the right choice for everyone. It’s best to consult with an estate planning attorney to determine if a revocable living trust is appropriate for your individual circumstances.
What are Digital Assets and Why should you include them in your estate plan?
A Digital Asset is any content that is stored in electronic form. Your Email, Facebook, Instagram and Amazon Photos, for example, are all digital assets, and as and such, they play an integral role in estate planning. Click the question to find out not only how to plan for digital assets, but also why it is so important to do so.