Estate Planning Essentials
Basic documents for Estate Planning.
There are five basic documents everyone should have for their estate plan. You don’t need to be rich to need to plan for what happens to your property after you are gone.
First and foremost is the Last Will and Testament. Your Will states what you want to happen to your property when you die. If you don’t have a will, New York State decides what happens and in all likelihood, it will not be what you want. If you want to see the state statute see EPTL 4-1.1 A will can be as simple as leaving everything to your spouse or as complex as you can imagine. The important thing is to have a will.
We have often been asked if the will kits you can buy in the store or online will work. Yes, they may work if you follow all the rules New York requires for the proper form and execution of a will. If you do it wrong, the court will reject it and your estate will be distributed according to the NYS intestacy rules shown above. In addition, you are missing out on the knowledge of an attorney who knows the legal and tax implications of various ways to distribute your assets.
Next is the Health Care Proxy. The Health Care Proxy appoints someone to make health care decisions for you if you become unable to make those decisions. Other states may refer to this as a Health Care Power of Attorney, don’t be confused, in New York it is call a Health Care Proxy. You should discuss with your Proxy your wishes and desires as to what sort of care and treatment you want. The Health Care Proxy should be given to your doctor so it can be kept in your chart available for the future.
A document that coordinates with the Health Care Proxy is a HIPAA Release. HIPAA is a federal law which prohibits your doctor from giving access to your medical records to anyone unless they have your permission. A HIPAA Release will allow your doctor to share your medical records with your Health Care Proxy and make it easier for them to make care decisions
Working along with the Health Care Proxy is the Living Will. The Living Will gives instructions to your doctor and Health Care Proxy on end of life decisions. It states whether you want life support and if so, to what extent. It is important that you discuss this with your Proxy and make sure they are comfortable with carrying out your wishes.
Finally there is a Durable Power of Attorney. A Power of Attorney appoints someone to act on your behalf for things like bank accounts, paying bills, dealing with legal matters. It is a very important tool should you become unable to make decisions or if you need help with day to day chores. It goes without saying that you need to appoint someone you trust implicitly since they will have your authority in advance to manage your property. The New York State law regarding Power of Attorney will change effective September 1, 2009. More about the change in a future blawg entry.