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Get Your Ducks in a Row

March 16, 2009

Given the current state of the world economy and recent local events, many of our clients have expressed a desire get their financial and household business matters in order. There are three basic estate planning documents that all individuals should consider when planning and organizing a life plan strategy, although the specific content of those documents will differ by personal circumstances.

  • Last Will and Testament: A Last Will and Testament is a legal document that includes your personal instructions regarding the distributions of your assets upon your death. The preparation of a Will allows you to designate the beneficiaries of your estate. Your Will may also name a person to serve as executor of your estate.
    A Will may also name a guardian for any minor children and designate the age at which such children will receive their inheritance. Parents of a child with disabilities can also express their preference relative to their child’s future care, education, job training and living arrangements and even establish a trust to supplement governmental benefits received by the disabled child.
  • Power of Attorney: A Power of Attorney is an important document that allows you to appoint an agent to make decisions concerning your legal and financial matters in the event you cannot do so for yourself. If something catastrophic happens and you become incapacitated, having a Power of Attorney in place can avoid the alternative of having a Court appoint a guardian, this could take several months and cost several thousand dollars.
  • Health Care Proxy / Living Will: A Health Care Proxy/Living Will allows you to designate an agent to make health care decisions in the event you are unable to do so yourself. It also allows you to document your wishes concerning treatment in the event you become terminally ill.

It is recommended that your estate planning documents be reviewed every five years to make sure your wishes are accurately documented.  If any of the categories listed below apply to you, it may be necessary that changes be made to your Last Will and Testament, Living Will/Health Care Proxy or Power of Attorney. Additionally, it may be necessary that you consult with an attorney for other estate planning concerns.

I have moved or will be moving in the near future:

If you should move to a different state or country, check to make sure that your Will is valid under the laws of that state or country.

I executed a Power of Attorney and/or Heath Care Proxy/Living Will prior to April of 2003:

The Health Insurance Portability and Accountability Act (a/k/a HIPAA regulation) restricts the release or disclosure of information and medical records regarding any past, present or future medical or mental health condition, by a physician, medical professional, dentist, health plan, hospital, clinic, laboratory, pharmacy or other covered health care provider, any insurance company.

I have had a change in assets or purchased a large life insurance policy and may have estate tax issues:

If your assets grow substantially, you should consider estate tax planning. You may be able to minimize this potential tax liability by updating your Will to include a Credit Shelter Trust or Disclaimer Trust. There are also a number of other tax saving devices qualified attorneys can recommend to address your individual financial situation.

I have had children since I made my last Will and need to appoint a Guardian and/or set up a trust.

It is very important that parents with minor children include in their Last Will and Testament an appointment of a Guardian for their children. This provision allows the parent to decide who they want to care for their children should they pass away. Without a Guardianship appointed in their Will, the Surrogate’s Court Judge will decide where the children will live and who will care for them. Although this is a difficult decision, most parents would like to make this decision themselves. Additionally, trusts may be included within the terms of the Will which allow you to indicate that the child/grandchild(ren)’s inheritance be held, in trust, until they attain an age designated within the Will. The trust may provide that the assets be used for the benefit of the beneficiary while actual control over those assets may be assigned to someone other than the beneficiary.

I have divorced  and/or  married since I made my last Will,  or  wish to change  a  named individual listed on my document since they were last executed:

If there is a change in the named individuals listed on your documents, such as by birth, death, divorce, marriage, or just a change of mind, your documents should be updated.

I have a disabled beneficiary and need to make special provisions for him/her to protect their entitlement to government benefits:

There are special considerations that need to be addressed when dealing with the sensitive and difficult decisions that face individuals with disabilities and their families. These issues include estate planning, meeting long-term health care costs, negotiating with governmental benefits programs and the need for guardianships. Another primary concern is how to protect assets so that a disabled individual is not impoverished, but remains entitled to government benefits. There are options such as Supplemental Needs Trusts that can protect assets, while at the same time protecting the disabled individual’s quality of life.