New York Estate Planning & Elder Law Blog
Many people make the mistake of thinking that they don’t need to engage in any type of estate planning. While you might not be one of the 1% in regards to financial wealth, you should still give great thought to what you would like to have happen if you become incapacitated or pass away. Various estate planning tools exist, but this article reviews six of the most helpful estate planning documents that you should consider creating.
# 1 – Beneficiary Designations
Retirement accounts, as well as life insurance death benefits, are distributed through beneficiary designations instead of through the terms of a will. As part of your estate plan, it’s a good idea to both review and update your life insurance policy and retirement account, particularly following major events like death and divorce. Remember, if you fail to update these designations, undesirable results can occur. Beneficiary designations also have important tax repercussions under the Secure Act. Under the Secure Act, some beneficiaries are no longer able to distribute retirement account assets over their lifetime.
# 2 – Durable Power of Attorney
A durable power of attorney allows you to select who will make financial as well as legal decisions if you become incapacitated. Utilizing a durable power of attorney can help you avoid countless complications. Without this document, no appointed individual might exist to pay your bills or make decisions if you become incapacitated. These documents can either shift power to someone else upon signing or when you become incapacitated.
# 3 – Family Guidance Letters
It’s a good idea to also create a guidance letter for family members addressing everything from funeral arrangements to how you’d like to pass on family members. Family conflict often arises from family members having a different idea of what the deceased loved one would have wanted. By providing adequate guidance, however, this problem can be avoided entirely.
# 4 – Healthcare Power of Attorney
Similar to a durable power of attorney, a healthcare power of attorney allows an individual to appoint someone to make healthcare decisions when the creator can no longer do so. These documents also authorize your agent to communicate with healthcare providers. Without a healthcare power of attorney, your loved one might be stuck in the undesirable position of having to appoint someone as guardian with the same costs and delays as having a conservator appointed. Ultimately, selecting an agent and providing this person with the appropriate guidance could greatly help to reduce time and trouble.
# 5 – Revocable Trust
Probate can be a timely and costly process. By creating a revocable trust (or living trust), it’s possible to avoid probate. Additionally, you can appoint a party to amend or revoke your trust during your lifetime. A person while alive and competent can also act as their own trustee. The primary benefits provided by these trusts are the ability to avoid probate and privacy.
Contact an Experienced Estate Planning Attorney
The estate planning process can be challenging, but an experienced attorney can help. Do not hesitate to contact Ettinger Law Firm today to schedule a free consultation.