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Estate planning is important for people of all ages, but as we age, the need for planning becomes even more critical. Many people avoid estate planning because they do not want to think about the end of life, failing health, or disability. Others believe that an estate plan is only for rich people who may have potential tax consequences. However, an estate plan is helpful for any adult and their families regardless of overall wealth. Because there may be other very important consideration that cannot be quantified purely in dollars. For example, a young couple with no significant assets but a small child or children may need to consider having Wills drafted just to designate legal guardians for the children in case both parents are disabled or should they pass away unexpectedly.
An estate is all the property owned both individually and jointly, including bank accounts, real estate, jewelry, etc., including any liabilities, or simply debts, owed on that property. Lack of an estate plan may mean a great difficulty to carry out a person’s wishes and can bring on a long, drawn out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for the adult and their family, as well as protection for their wishes.
Below are some basic guidelines for what should be included in an estate plan.
- Last Will and Testament (Will). A will provides for an executor of the estate – someone who will take care of managing the estate, paying debts, and distributing property as specified. The distribution of assets can be outlined in the will. This can be as broad or as detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be assigned. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will.
- Living Will. A living will outlines a person’s wishes for end of life medical care. It can include, in as much detail as the senior wishes, what medical treatments the Client would or would not like to have in specific situations. A living will takes the stress of making those decisions off of family members and helps to keep peace in families during times that can be difficult and emotional. A senior or any other able adult can spell out, in the Living Will, how they want their funeral and burial to be carried out as well.
- Healthcare Power of Attorney (in New York, a Health Care Proxy). A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for a senior adult. A durable power of attorney will remain in effect for the person if they become unable to make their own decisions due to disability.
- Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the adult Client for matters relating to finances. The durable financial power of attorney stays in effect if, for example, the senior adult becomes unable to handle their affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided, and the senior has the final say in who will make decisions relating to finances during their disability.
- Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. The benefit of a trust is that it does not go through probate, as compared to a will. Property is still distributed at the death of the trustmaker, but it is done without the need of a court. This also allows for privacy of the trustmaker. With a will and probate, all of the deceased person’s assets and the terms of their will is made public.
Having an estate plan is necessary if you or your senior loved one wishes to have a say in what happens at the end of life and with the assets after death. Consulting and planning with an elder law attorney will help to ensure that all options are explored and the best possible solution is utilized. The elder law attorney can walk you through all of the necessary parts of the estate plan, provide explanation, and prepare the paperwork. Elder law attorneys will help take the guesswork out of estate planning.