“First, let’s debunk the myth that an estate plan needs to be both elaborate and expensive.”
Many people think you have to be a millionaire to need an estate plan and investing in an estate plan is too costly for an average American. Not true! People of modest means actually need an estate plan more than the wealthy to protect what they have. A recent article from TAPinto.net explains the basics in “Estate Planning–Getting Your Affairs in Order Does Not Need to be Complicated or Expensive.”
Everyone needs an estate plan consisting of the following documents: a testamentary document such as a Last Will and Testament, and a General Durable Power of Attorney, an appointment of health care agent or a Trust as a Will substitute , and Advance Medical Directive or Living Will.
It is true that unless your estate is valued at more than $11.58 million, you may not be as concerned about federal estate taxes right now, but this may change in the near future. NY’s estate tax has an exemption amount of $585,000 with a tax rate between 12-16 %.
If you have young children, your will is the legal document used to tell your executor and the court who you want to care for your minor children by naming their guardian. The will is also used to explain how your minor children’s inheritance should be managed by naming trustees.
Why do you need a General Power of Attorney? This is the document that you need to name a person to be in charge of your affairs, if you become incapacitated and can’t make or communicate decisions. Without a POA in place, no one, not even your spouse, has the legal authority to manage your financial and legal affairs. Your family would have to go to court and file a guardianship action, which can be expensive, take time to complete and create unnecessary stress for the family.
An Advance Medical Directive, also known as a Living Will, is used to let a person of your choice make medical decisions, if you are unable to do so. This is a very important document to have, especially if you have strong feelings about being kept alive by artificial means. The Advance Medical Directive gives you an opportunity to express your wishes for end of life care, as well as giving another person the legal right to make medical decisions on your behalf. Without it, a guardianship may need to be established, wasting critical time if an emergency situation occurs.
Most people of modest means may only need only these three documents, and they can make a big difference to protect the family. Even for modest estates, when the family includes disabled children or individuals, owns a business or real estate, there are other documents often needed to address these more complex situations. Often, a trust may be advised. However, simple or complex, your estate and your family deserve the protection of an estate plan.
Contact our firm today to get your legal matters in order.
Reference: TAPinto.net (Sep. 23, 2020) “Estate Planning–Getting Your Affairs in Order Does Not Need to be Complicated or Expensive”