Let Suzan D. Herskowitz help you with Wills | Trusts | Probates | Advance Directives
You do not have to be rich or old to have an estate. When people here the term “estate” they think of wealth and large homes with staff like Lord Grantham and his family in Downton Abbey. However, “estate” is a legal term used to describe what you own.
Estate planning then is the means by which you evaluate your wealth and determine how to preserve it for yourself as you grow older and then for your family after you have died. It is for individuals of any age and of any income level. It is for single people, married couples, couples that live together, anyone with children, blended families, grandparents raising grandchildren and families with special needs family members.
Your estate planning attorney reviews YOUR individual needs in a way that a computer program or website cannot and helps you to navigate the best way to care for your loved ones. Through the interview process I can help you determine what to do if you become disabled or die, appoint a guardian or trustee for your children, or need additional assistance when you age. Your unique set of circumstances will guide me in determining a plan that addresses your unique family circumstances.
A number of estate planning vehicles are available to facilitate your needs and goals. Some of these are listed here but are by no means an exhaustive list or explanation of estate planning.
Wills | Trusts | Probates | Advance Directives are the most common types of estate planning vehicles.
A will is a document that takes effect only upon your death. The purpose of the will is to direct the executor of your estate to distribute your probate assets to your beneficiaries as instructed in the will. Your executor is the person you name to administer your estate after your death.
When you die without a will you are said to be intestate. In that case, the State has a will ready made for you. Unfortunately, the State’s idea of who your beneficiaries are may be quite different from yours. In fact, it is commonly believed that the spouse always receives the deceased spouse’s assets upon his or her death but the sad truth is that if it is a second marriage with children from a prior relationship, that will not happen. The only way to insure that the people you want to receive your assets upon your death is to do proper planning.
Bear in mind that neither a will nor its executor can assist you if you become incapacitated because a will only has effect upon your death. I always strongly recommend that people obtain a good durable power of attorney for finances and a medical directive (including a medical power of attorney and living will) to prevent the need for a guardianship and/or conservatorship and the unnecessary hardship and burden that is placed on a family when they suddenly have to deal with a serious illness and incapacity of a loved one.
A durable power of attorney is a legal document in which you name an agent to handle your finances. You can give the power to handle finances immediately, which most couples will do, or give the power only upon your inability to handle your own affairs. This means that if you are no longer able to manage your financial affairs, your agent can do it for you. You may be unaware that due to ownership and privacy issues, your family cannot automatically discuss your affairs with your banker, for example. The banker will be prohibited from giving you any information, let alone allow you to manage your accounts. With a power of attorney, your agent will be given the authority to talk to the bank, your life insurance company, the Internal Revenue Service, your financial advisor, and deal with any other issue there may be concerning your finances, your real estate, and business concerns, as well as manage any financial, real estate and business concerns you may have on your behalf.
A medical directive comprises three parts and you may have one, two or all three of them. The part that most people are aware of is what we commonly call a living will. The living will informs your medical provider if they are to withhold or withdraw certain medical treatment for you if you have a terminal condition. Numerous court cases have held that without this document your family may not be able to demand that such treatments are withheld or withdrawn, forcing a family member to live unaware for an extended period of time, or spend time and money obtaining a court judgment ordering the medical provider to withhold or withdraw such care.
The second part of a medical directive is a medical power of attorney. This is most akin to the durable power of attorney for finance in that it appoints an agent who can handle your medical care if you are unable to do so. Medical power of attorneys only take effect upon your incapacity and include the power to talk to your doctors, therapists, medical billing departments, hospitals and such specifically about your medical care. Everyone in the United States has signed at least one HIPPA authorization form in the last few years. The medical power of attorney specifically gives your agent the authority to your medical records despite HIPPA privacy laws.
The third part of a medical directive is an organ donation authorization. The authorization is for your agent to donate all or a part of your organs and tissues for transplant and/or research and education. That doesn’t mean your organs and tissues will be used. It just means that your agent may do so if the need for your organs and tissues arise upon your death.
There are two types of trusts: Revocable living trusts and irrevocable trusts. A trust is an estate planning vehicle in which you, as trustor (sometimes called settlor or grantor), transfer the ownership of your property to a trustee who then manages all of the property on your behalf and that of your beneficiaries.
Trusts have an advantage. Since all of the property is transferred to the trust when you die, little, if any of your property requires probate. Additionally, the trustee can manage the property if you become incapacitated without having to be your guardian or conservator, insuring minimal involvement by the courts. Unlike wills, trusts are private documents and do not become public information (with limited exception). In some instances, a trust can even assist you in lessening the burden of estate taxes.
A revocable trust (also called a revocable living trust) takes effect while you are alive. During your lifetime you can be the trustee, unless you become incapacitated and then your successor trustee takes over. When you become incapacitated or die, your successor trustee continues the trust’s management for as long as the trust’s terms provide. You might want the trust to continue after your death to provide for your spouse, children or grandchildren. How many people want their children or grandchildren to inherit at the age of 18 or 21? The trust can be set up to continue until such time that you think that child can handle his or her own affairs and not waste away the funds impulsively or rashly. When those needs have been met, the trustee distributes the remaining trust property to your trust beneficiaries so that they can then do what they want with the remaining funds.