Click on the questions below to view answers to common estate planning questions.
What is estate planning?
If someone dies, their property is passed to another person. In the US, any competent adult has the right to choose how their assets are distributed after their passing. There are some exceptions. A proper estate plan develops a strategy to minimize potential estate taxes and settlement costs, as well as coordinate what would happen with your home, investments, business, life insurance, employee benefits, and property when a person experiences a disability or death. An estate plan should include directions for someone you trust to carry out your wishes regarding health care matters if you can’t give the directions yourself.
Why is it important to establish an estate plan?
You need a formal estate plan regardless of the number or value of your assets. If they are important to you, only proper legal arrangements ensure that your beneficiaries receive them. It will not automatically fall to a family member you trust. After you die or become incapacitated, the state’s intestacy laws take over, and decisions are made in a public Probate Court, often resulting in the wrong people getting your assets as well as higher estate taxes. It can be expensive and tie up the assets for a long time before beneficiaries finally receive them. Your family may argue over who has the authority to manage your affairs, dissolving relationships money or family heirlooms.
What does my estate include?
Your estate is all that you own, regardless of location, including:
- Home or any other owned real estate
- Business and related owned property
- Share portions of joint accounts
- Retirement accounts
- Life insurance policies
- Property owned by a trust which you have a significant control over
How do I name a guardian for my children?
When you have minor children (under age 18) and there is a surviving parent, they will act as sole guardian, live with, and have custody over the children. This is true even if you name others as the guardian in your estate planning documents. It’s important to designate at least one alternate guardian in case something happens to the surviving parent, a selected guardian can’t serve, or the court doesn’t appoint them.
What estate planning documents should I have?
An estate plan should include many documents, prepared by an attorney based on in-depth counseling and the details of your particular family and financial situation. They include the following:
A Living Trust can hold legal title to and provide a way to manage property. You are the Trustee and lifetime beneficiary. You designate a successor Trustee to follow your instructions if you die or are incapacitated. A trust usually becomes effective immediately, unlike a Will. Your Living Trust is “revocable,” allowing you to make changes and even terminate it. One of the great benefits is avoiding or minimizing the delays, expense, and publicity of Probate Court.
A Living Trust-based estate plan also needs a Pour-over Will. A guardian must be named in the Will for those with minor children. The Pour-over Will allows the Executor to transfer any assets owned by the decedent into the trust and distribute according to specified terms.
A Last Will and Testament (Will) is designed to transfer assets to your family or other beneficiaries. It names an Executor, a person you trust to carry out your wishes. When you have minor children, a Guardian should be named along with alternate in case one is unable to serve. A Will won’t become effective until after it goes through Probate Court.
A Durable Power of Attorney for Property lets you to carry on your financial affairs if you become disabled. Without one, a guardian or conservator may be appointed in court to make decisions for you during a period of incapacitation. This guardianship process is time-consuming, expensive, and emotional.
There are mainly two types of durable powers of attorney:
- A Present Durable Power of Attorneytransfers power immediately to your attorney
- A Future (Springing Durable Power of Attorneythat only comes into effect when a doctor determines you are disabled
A spouse, domestic partner, trusted family member, or friend are usually given power of attorney and ensure your intentions are followed exactly. Decide who will you trust to make decisions for you immediately upon disability.
A Durable Power of Attorney for Health Care (Health Care Proxy) designates a person or persons to make medical decisions on your behalf. They may be allowed to decide about all health care or only about specific treatments. They must also follow your instructions and ensure that hospitals, doctors, and other health care professionals follow these decisions.
A Living Will describes your preferred medical treatment in the event become permanently unconscious, terminally ill, or unable to communicate decisions about treatment. Combined with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expenses and delays in the event of future incapacity.
In addition to the above documents, a HIPAA Authorization form allows the release of medical information to your designee, successor trustees, family, and other people you trust. Even with a Durable Medical Power of Attorney, the 1996 Health Insurance Portability and Accountability Act (HIPAA) may prohibit your doctor from releasing information.
Contact us to learn more!
The Law Office of Gold and Dezik assists clients in the Western New York area, including Niagara Falls, Niagara County, and Buffalo.