“Regardless of the pandemic, experts say it’s important to plan for when you’re not here—that is, give thought to what would happen to your bank accounts, your home and your belongings, as well as, perhaps, your dependents.”
As the coronavirus continues to sweep across through the U.S. and the death tolls continue to rise, many people are starting to put their estate plans in place, as reported by CNBC.com in the article “A will doesn’t cover all your bases when it comes to end-of-life decisions. Here’s what else you need.”
It’s true–your will, or last will and testament, is just one of several legal documents you need to help loved ones know what your wishes are. If there is no will, all kinds of problems are created. If you have minor children and no will, the court will decide who will care for them. With no will, the laws of your state determine who will receive your assets. This could result in distant cousins receiving your estate assets of they are the surviving family members- even if it’s a relative you’ve never met—or one you’ve loathed for decades.
For those who have partners but are not married, without a will or death designator, your assets won’t go to them. They also won’t have legal standing contest the outcome. The courts typically pass assets on to your closest blood relatives. That might not be what you want.
However, a will is only one part of your entire estate plan. You don’t need to live on “an estate” to have an estate. Actually, your estate refers to everything you own—financial accounts, possessions, real estate and digital assets. Putting a plan in place for those assets helps lessen the chances your family will fracture when you have died. Your assets will also go where you want them. It’s a kindness to your loved ones.
A will lets you convey your wishes about who gets what when you die, except for assets that pass outside of a will. These are accounts where you have named a beneficiary, like insurance policies, retirement accounts and jointly owned property. The beneficiary designations and joint ownership (with rights of survivorship) always supersede your will, which is where many people make big mistakes. If you don’t update your beneficiary designations as you move through life, the wrong person might inherit significant assets. There also won’t be anything your intended heirs can do about it.
Another big part of your will involves choosing a person to be in charge of carrying out your intentions—the executor. This is a job that requires someone who is responsible, reliable and comfortable with handling financial and legal matters.
You’ll also need a health care directive, sometimes called a living will, to outline your wishes, if you become incapacitated because of illness or injury. This gives loved ones the instructions they need if, for example, you are on life support and a decision has to be made about whether to continue or to let you pass. Don’t forget a Power of Attorney. This document allows a person of your choice to carry out all of your financial and legal affairs on your behalf. You want to pick someone who is smart and trustworthy. They might need to do everything from selling your home to managing your investments.
Estate planning also includes preparing all of the important documents in your life, so that your executor can find them easily, including your will itself, other legal documents, information about bank accounts, investment accounts and even your Social Security number. The more organized you can be, the more easily your loved ones will be able to administer your estate.
If you want your children to receive money from you but are concerned about their ability to manage an inheritance, you may want to add a trust to your estate plan. Your assets go into an irrevocable trust, instead of directly into their hands. You must give up control to the trustee’s management. You also select and appoint a trustee who will oversee the trust. It can be another family member, the alternate sibling, or a professional trustee such as a bank or your attorney. The trustee will decide when your children receive partial or incremental payments or the entire trust fund at the trustee’s choice and according to your instructions. The distribution could be tied to achieving certain goals—like graduating from college or getting their first apartment.
One last point: many people today are downloading estate planning forms from the internet. These forms may not be admissible in NY or the state of your primary residence and may not have the latest and best options. Every state has its own estate laws, and no one document works in all states. Our firm’s estate planning attorneys will be sure your last will, trust or other important legacies conform with NY law and any other states you indicate you have connections to which will eliminate the risk that a judge will reject your will, because it does not comply with state law.
Reference: CNBC.com (July 27, 2020) “A will doesn’t cover all your bases when it comes to end-of-life decisions. Here’s what else you need.”
Please call our office anytime for assistance in your Estate Planning, Long Term Care Planning, Medicaid or Special Needs Planning: (718) 238-6960 or firstname.lastname@example.org. We will be happy to schedule an appointment with one of our attorneys.