Estate planning can be overwhelming for many people, in part, because good estate planning involves planning not just for foreseeable circumstances, but for unforeseeable ones as well. Below are several different topics to consider discussing with your New York estate planning attorney.
Last Will and Testament
Results from a recent AARP survey indicate that 41% of baby boomers and 71% of people under the age of 34 do not have a will. Likewise, many people who do have a will do not keep it up-to-date. It is important to revisit a will after an important life event, such as a birth of a child in the family, divorce or re-marriage. In addition to apportioning your assets as you would like among your children, spouse, relatives, friends, or charities, you can direct who will become a guardian for young children in the event of your death. (See related article “What if Someone Dies without a Will“)
Revocable Living Trust
After death, an estate goes through a court-supervised process called “probate”, if there is a will, and “administration”, if there is no will. This process ensures that the deceased’s debts are paid, that estate taxes are paid, and that the assets are divided according to the will or New York law. People wishing to manage and distribute their estate without court’s involvement can set up a revocable living trust. Any asset placed into the trust will be administered by a trustee named in the trust according to the wishes of the person who set up the trust.
Power of Attorney
A power of attorney is a legal arrangement through which a person designates an agent to make financial, business, or legal decisions, if they cannot make decisions for themselves. The power of attorney is only valid during the principal’s lifetime, and has no effect after death. From time to time the power of attorney laws and rules may change, with the latest changes becoming effective in 2010. Therefore, it is important to make sure that the power of attorney is up-to-date, so that it will be accepted for financial and business transactions carried out by the agent on behalf of the person.
Health Care Decisions
In addition to delegating the management of financial affairs, by signing a health care proxy, a person can designate an agent to make health care decisions, including whether to use or disconnect life support treatment. Health care decisions can also be communicated through a document, called a “living will”.
Release of Medical Records
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) standardized the exchange, privacy and security of health information. HIPAA Medical Release Forms enable patients to authorize medical providers to release medical records and to discuss medical conditions with the designated agents. These authorizations may be critical in case of an emergency.
Final Arrangements
Many people would rather not think about their final arrangements. However, this may be an important topic to discuss with a New York estate planning attorney. If family members do not have guidance as to what the person would have wanted, disagreement can add conflict to an already emotional time. New York law allows appointment of an agent for control of disposition of remains. Without such appointment, the law creates a hierarchy of the order of who is in charge of the disposition of remains.
Special Needs
If a member of the family has special needs, this is an important topic to discuss with an estate planning attorney. Special needs raise a number of issues that must be addressed. For children with developmental disabilities and mental illness there may be a lifetime need for asset management. It is also important to ensure that a person with special needs qualifies for government benefits such as Medicaid and Supplemental Security Income and that those benefits are not interrupted in the future.
Tax Consequences
American Taxpayer Relief Act of 2012 (“ATRA”) made the $5 million (inflation adjusted) gift, estate and generation skipping tax exemption permanent. Therefore, estates that fall under that amount pay no federal tax. However, in New York, the state estate tax exemption is only $1 million. A New York estate over $1 million is subject to a New York State estate tax. Proper and timely planning can eliminate or significantly reduce this tax, therefore maximizing the value of the assets passing down to the beneficiaries.
If you wish to discuss any of the above matters with a New York Estate Planning Attorney, please feel free to contact our office for an appointment.
