Estate planning primarily involves what happens to your assets after you pass away, but what if you become too ill to manage your own life? That too is part of estate planning.
Every estate plan should include the following legal documents …
- Last Will and Testament can stipulate who will inherit your assets and names an executor who orchestrates finalizing a person’s life. If you have joint accounts, those assets do not pass under your will. The will only passes assets for which there is no other legally binding direction. For example, if you own a house in your own name alone, it will pass under your will. But if you own your home jointly with your partner, the survivor inherits the house. It doesn’t pass under your will. A will can also create a trust to take effect when you are no longer alive.
- Durable Power of Attorney lets you name someone now, who can take over later if you can no longer manage your own affairs. You can authorize your agent to take care of bill paying, living arrangements, investments, and other aspects of everyday life. If you have investments at large banks, they may ask you to complete their forms as well, to enable your agent to speak on your behalf.
- Health Care Proxy appoints a person to make health care decisions for you if you cannot. Regardless of your age, it can become essential if you are in a car accident or need someone to answer questions on your behalf during routine surgery. Every time you enter a hospital for care or treatment, you will be asked to sign a proxy – but you may have your own with you at all times.
- Living Will (or DNR, Do Not Rescuscitate) provides instructions to medical personnel about your desired end–of–life care. Some decisions made on this document, such as “no intubation,” should be reviewed now, in light of Covid-19, and perhaps reconsidered.
While these documents are the cornerstone of basic estate planning, trusts are often used in tandem. A trust is an arrangement where funds are set aside to be held, managed and ultimately distributed to beneficiaries in a way to achieve a particular goal. For example, trusts are created to avoid probate, save taxes, provide for children and protect assets if Medicaid may be needed down the road.
Susan G. Parker, Esq. is an attorney in Briarcliff Manor. Legal questions? > (914) 923-1600 or Susan@susanparkerlaw.com.