Estate Planning And The Holidays: A Checklist For Your Family

While enjoying time with your family this holiday season, you might want to consider broaching the subject of your estate plan. Since this may be one of the few times when you are around a larger group of loved ones and you have a chance to take stock of your current family situation, estate planning and the holidays can go together. You can give your family the most important gift of all this holiday season: the gift of peace of mind. Telling your loved ones about your wishes and the plans you have made can prevent misunderstandings and unburden your loved ones from having to make difficult decisions. Consider the following checklist for your family as you begin to broach the subject of estate planning during the holidays.

Property

A large part of many estate plans is what will happen to a person’s property after they pass away. Many people draft a Last Will and Testament (will) to provide clear instructions regarding the distribution of their property after their death. As the New York State Bar Association explains, the laws of intestacy will apply to how a person’s assets are distributed without a properly executed will. These are the default laws that favor a person’s nearest relatives to inherit their property after their death. In order to avoid having your property distributed to family members against your wishes according to intestate laws, you may want to consider visiting with an estate planning attorney to ensure your property is passed on to the loved ones you choose after your death.

Another option to distribute property following your death is with the creation of a trust. The New York City Bar Association defines a trust as a financial plan that protects and manages a person’s property while they are alive. After a person’s death, a trust can prevent the need for court proceedings (probate). A person can place various types of property in a trust, control the property during their lifetime, and leave clear instructions on how the property should be managed after their passing.

During this holiday time, consider carefully all of your property (real estate, stocks, bonds, cash, cryptocurrency, valuable possessions, collectibles and more) and who you would want to receive this property after your death.

Financial Accounts

Another important consideration for estate planning is what will happen to your financial accounts after you pass away. If another person is named as a joint tenant with rights of survivorship on the account, they will be able to access and control the funds in the account. However, if only one person is on the account, the account owner can often designate a beneficiary who will receive the funds upon their death by completing a beneficiary designation form that outlines this information.

A person can designate various types of accounts and benefits through beneficiary designations, including:

• IRAs
• 401(k)s
• Pensions
• Stocks
• Bonds
• Investment accounts
• Checking accounts
• Savings accounts
• Life insurance policies

Oftentimes, a trust can be named as the beneficiary of such accounts, which can be a useful way of providing for minor beneficiaries.

Power of Attorney – Medical Decisions

A thorough estate plan will not only address what happens after a person’s death but also what happens in case of a medical crisis. Individuals have the right to create a living will that outlines end-of-life treatment they want and do not want. This document states whether life-saving medical measures should be taken to prolong a person’s life. A person can also create a healthcare proxy that names a trusted person to make medical decisions on their behalf if they are unable to make these decisions themselves. Consider who you would want to make these important medical decisions if you suffer an illness or accident that leaves you unable to make these decisions for yourself.

Power of Attorney – Financial Decisions

A person’s estate plan can also create safeguards in the event they become incapacitated and can no longer effectively make decisions regarding their personal and financial affairs. A durable power of attorney can help manage the financial and legal details of a person’s life. Consider who you would want to make these important financial decisions if you suffer an illness or accident that leaves you unable to make these decisions for yourself.

Long-Term Care

Many people will ultimately need to turn to a long-term care facility for care at the end of their life, or if they suffer an illness or injury. As such, they may need to financially prepare for this possibility. An experienced estate planning attorney can discuss Medicaid eligibility, long-term care insurance, and other strategies that can effectively plan for long-term care.

When to Make Changes in Your Estate Plan 

While estate planning and the holidays can sometimes go hand in hand, there are other times when an update to an estate plan may be necessary, such as in the case of:

• A new marriage
• Divorce
• Birth or adoption of a child
• Separation from a spouse
• Death of a beneficiary or fiduciary
• Change in relationship to beneficiaries or fiduciaries
• A significant change in the value or character of assets
• Acquisition of real property
• Purchase or sale of a business
• Relocation to another state
• A new need to care for a loved one with special needs
• A change in tax laws that might impact the estate plan

The Jennifer V. Abelaj Law Firm can review your existing estate plan and explain when it might be necessary to update your plan.

Practical Tips for Mixing Estate Planning and the Holidays

If you are planning to bring up your estate plan this holiday season, here are some practical tips for achieving the outcome you want:

Talk About It

The holidays should not be the only time your family hears about your plans and wishes. Make the conversation an ongoing one so that they are never left in the dark. Also, plan ahead of time and let your loved ones know that you want to set aside some time during your family visit for this important conversation. Consider whether or not it would be more appropriate to have the conversation before the festivities or after your holiday events as a family.

Approach the Subject with Sensitivity

It can be difficult for adult children to see their parents age or not be as active as they once were. It can also be difficult for people to confront their mortality and talk about death. Additionally, many people feel uncomfortable talking about money.

For these reasons, it is important to approach the subject with sensitivity and to be prepared for an emotional response. The person should focus on wanting to provide peace of mind and ensure their healthcare values are known.

Ask for Help from a Professional

Having a professional available for the conversation can be a helpful buffer. A professional can discuss the issues matter-of-factly and provide an objective perspective. He or she can also explain the purpose of an estate plan and the benefits of being proactive about creating one at any age. You may have the ability to consult with an estate planning attorney during the holidays by phone or even a video call to ensure that all of your loved ones have an opportunity to understand your wishes and even ask questions.

End on a Positive Note

Talking about your estate plan need not be a morbid or negative experience. Emphasize your desire to have your wishes known and respected so your loved ones have peace of mind.

Contact an Estate Planning Attorney to Learn More  

The holidays are a time for families to get together and enjoy each other’s company. However, these types of events also present a perfect opportunity to discuss with family your wishes regarding your estate plan. Consider contacting your family ahead of the holidays and let them know your intentions to have this important conversation. If you need help devising a plan regarding your discussion with your family with respect to estate planning and the holidays, contact the experienced estate planning attorneys at the Jennifer V. Abelaj Law Firm at 212-328-9568 today.

Estate Planning for Young Adults and College Students

Congratulations!  You graduated high school or college and are ready to start adulting.  Moving into your new dorm.  Meeting or seeing new friends.  Long days and nights studying.  Fun on the weekends – of course!  College and post-grad is supposed to be a fun and enlightening time.  But with the fun, also comes some responsibility.

Welcome to Adulthood – Under the Law anyway

As soon as you turn 18, the law says that you are an official adult.  Maybe you are still living with your parents, so you don’t feel like an adult.  But if something happens to you, they have no legal rights to make decisions on your behalf.

Important Adult Decisions:  Who do you Trust to Help?

You can appoint someone you trust to take care of your affairs if something happens to you.  This may be one or both of your parents, an aunt or uncle, a sibling, or a trusted friend.

Document Your Selections and Authorized Powers

The basic and simple documents to appoint a trusted person is a Health Care Proxy and Power of Attorney.

In the Health Care Proxy, you choose the first person that you want to be responsible to speak with doctors and hospital staff, make medical decisions about treatment and surgery, and choose to withhold life support if you are in a catastrophic health situation.  You can appoint more than one person, in successive order.

This document only takes effect if you cannot communicate your own preferences.  This might occur if you are in a coma.  So long as you are still able to communicate, you have complete control over your own health care decisions.

In the Power of Attorney, you may authorize one or more persons to make financial decisions on your behalf.  This might include speaking with your bank, communicating with your Bursar office, or paying your outstanding expenses.

This document is useful even if you are not sick or injured.  It may provide convenience to your agent to assist in your financial affairs while you are on campus and away from home.

Easy to Prepare and Sign

In order to prepare a Health Care Proxy, you need to provide your name and home address and the name, home address and telephone numbers of your selected agents.  Once the document is prepared, you must sign it in the presence of two witnesses.  That’s it!

Preparing a simple Power of Attorney is just as easy.  Provide the name and home address of your chosen agents.  Decide if you want them to be able to work separately or if they must act together.  Once the document is prepared, you must initial it in certain sections, sign and date it in the presence of two witnesses and a notary.  That’s it!

An attorney can easily prepare these documents for you.  Once you have them signed, they are valid until you decide to execute a new document.  This means you sign once, and you may be covered for many years without having to think about it again.  But you have the peace of mind that someone is appointed to take care of you and your affairs if you cannot do so.

Now is the Perfect Time

The summer or winter break is an ideal time to prepare these documents.  It give you the opportunity to consider and decide who should be your agents, work with an attorney to prepare and sign the documents, and have it done before you head back to your studies.

Flat-Fee for Young Adults (ages 18-24)

Our office is currently offering these important documents to young adults (between the ages of 18 and 24) for a low flat-fee of $175 per document. We can turn them around for your signature within 2 weeks. This includes supervising the execution and providing witnesses and a notary.  Do not hesitate to contact me if you would like assistance.

New York State Enacts NEW Power of Attorney Form

Effective June 13, 2021, New York State will have a new Power of Attorney form.  This is a significant change to the existing from, which was last revised in 2010.

The goal of the new document is to make the signing process easier by eliminating the numerous – and somewhat confusing – sections that had to be initialed and to allow for an easier experience when attempting to use the document at a financial institution.

What are the major changes?

1. The agent is authorized, by default, to gift up to $5,000 per year per recipient without the need for additional authorization within the Power of Attorney.  The prior maximum amount was $500, unless a Statutory Major Gifts Rider was also executed.
2. And speaking of the Statutory Major Gifts Rider, it has been eliminated.  Any modifications which expand or limit the agent’s default gifting authority is included in the Power of Attorney “Modifications” section, instead of in a separate Rider.
3. The Principal’s signature must now be witnessed by two disinterested persons, as well as notarized.  Previously, only a notarization was required.
4. The statute includes detailed enforcement provisions which a third party must comply with if it does not honor a validly executed Power of Attorney.  If a third party refuses to honor the document, it must provide written notice to the agent within 10 days of presentation, along with detailed reasons.  An agent may be awarded damages, including attorney’s fees and any costs associated with the third party’s unreasonable refusal to honor the document.
5. There is clear guidance on how a Principal may direct another person to sign the Power of Attorney on his or her behalf.  This is particularly important for individuals who have physical challenges, such as holding a pen or limited vision.

Do I need to execute a new Power of Attorney?

Not necessarily.  So long as your existing “old” Power of Attorney was validly executed, you do not need to execute a new document.

Do the Detailed Enforcement Provisions apply to my existing Power of Attorney?

Yes!  An “old” validly executed Power of Attorney is grandfathered into the new rules and third parties must comply with the new enforcement provisions.

What else do I need to know?

Although the new Power of Attorney requires less initialing and no longer includes a Statutory Major Gifts Rider, it will likely include many modifications and may be just as long (or longer) than your prior document.

This might be a good time to review your appointments in existing document and determine if you would like make updates, whether to your Power of Attorney, Will or Health Care Proxy. If you have questions, please do not hesitate to contact me.