Financial Planning Services in New York

Estate Planning

WHAT IS ESTATE PLANNING and
WHY IS IT IMPORTANT?

The goal of estate planning is to document your wishes in the event that something happens to you (incapacity and/or death). Think of your estate plan as something that advocates for you when you’re unable to. It also protects your loved ones during distressing times when emotions can run high. In the absence of formal estate plans, state law takes over; that can be especially troublesome if your state’s laws don’t align with your wishes! This is extra important for LGBTQ+ folks. There are four essential documents that are part of a formal estate plan:

Last Will & Testament

This document sets instructions about what will happen to your assets upon death and further instructions that you leave behind upon your passing. Some questions to consider:

Who can be the executor and alternate executor for your will?
What type of legacy do you want to leave? Do you have any specific objectives?
To whom do you want to leave your assets and property? Do you have charitable wishes?
Are there other family/friends you would like to include beyond immediate family members?
If you have children, who would you like to appoint as guardian?

Power of Attorney

This ensures that a loved one (an “agent”) can act on your behalf in financial and legal matters (write checks, sign documents, etc.) should you become incapacitated. This document does not enable an agent to make healthcare decisions on your behalf. If you don’t have a Power of Attorney in place, you will have to go through a legal process to get one after you are incapacitated, which as you may guess, is a complex and challenging process.

Who is a person who can reliably handle my affairs if I cannot?
Who is a good alternative to this person?

Living Will

This is a document crafted with instructions for the type of care you’d like to receive if you become terminally ill or permanently mentally incapacitated: that is, this document will lay out directions for your care if you are unable to do so.

Are there any specific ways that you would like to be handled if you are terminally ill?
Are there limits to your care you would like to impose? Would you like to be kept alive through artificial means? Would you like to be treated for pain?
Do you have strong beliefs about how care should be administered?
Would you like to be an organ donor?

Health Care Proxy

This document appoints someone to make healthcare decisions on your behalf. A healthcare proxy is similar to “power of attorney” only this is limited to healthcare. It ensures that the person you trust is the one making medical decisions on your behalf.

Who can make medical decisions on your behalf and follow your wishes?
Who is a good alternative to this person?

SOME COMMON QUESTIONS ABOUT ESTATE PLANNING

What is probate or "the probate process"?

It is the legal process through which a will is validated and administered by a court, allowing for the wishes to be carried out by the executor. It takes time, legal advice, and costs some money. It is also public.

Do I need a trust?

Maybe! There are many different types of trusts. The creation of a trust (either while living or upon your death) is not solely about reducing a tax burden! Generally, a trust is used to:

Avoid the probate process

Protect minors or special needs loved ones, who need assets to benefit from, but cannot manage assets on their own

Specifically direct how you would like your assets to be spent such as given to charity or released to family members upon certain milestones or ages.

For the potential for tax efficiency in the case of high net worth individuals/couples.

Why is account / asset titling so important?

Despite what a will documents, you need to ensure that whatever titling you have on your assets (e.g. beneficiary on a retirement account) is consistent with your wishes. Account titling supersedes what the will says!

I'm single, do I still need to do estate planning?

In the absence of an estate plan, state law will dictate what happens to your assets upon death. Or doctors may make medical decisions on your behalf. If this is fine with you, then there isn’t an intrinsic need for an estate plan.

I'm partnered, but not legally married. What are my rights?

Sadly, none. It doesn’t matter how long you have been together or cohabitating with a partner. If you are unmarried and have no estate plans, you have no legal rights. Estate planning can be particularly important in this situation.