Estate Planning

Estate planning involves discussing with an experienced attorney your wishes regarding the disposition of your assets, the handling of your financial affairs, and the making of your medical decisions.  At O’Connell and Aronowitz, we have attorneys who are well versed in handling all these matters.  A proper estate plan involves the drafting and execution of the appropriate estate planning documents, which can include: Wills, Trusts, Powers of Attorney, Health Care Proxies, and Living Wills.  What follows is a brief overview and then additional questions and answers regarding these key estate planning documents.

Wills

A Last Will and Testament, commonly referred to as a “Will” specifies how your property and assets will be distributed at the end of your life, and who will receive them. A Will also allows you to name a trusted person to act as your personal representative, or executor, who will be responsible for carrying out your instructions. For a Will to be effective, it must be submitted for probate in your local County Surrogate’s Court.  Wills and Trusts are not mutually exclusive.  For example, you can potentially have a Trust set up in your Will to hold and manage assets for your minor children.  For further information on Wills, please see the “Questions and Answers about Wills” below.

Trusts

As an alternative to a Will as your primary estate planning document, you can establish a Trust during your lifetime. A properly drafted lifetime Trust can be part of an overall estate planning strategy to avoid the necessity of probating a Will. Such a Trust will take title to your property, while allowing you to continue managing your assets during your lifetime. It also allows you to name an individual to manage your affairs in the event of your incapacity as well as to settle your estate when you die. In addition, a Trust is a private document (unlike a Will) that does not get filed in the local County Surrogate’s Court.  For further information on Trusts, please see the “Questions and Answers about Trusts” below.

Powers of Attorney

Powers of Attorney concern the handling of your financial matters, while you are still living.  Through your Power of Attorney, you can designate one or more individuals to make financial decisions for you.  The extent of the authority you give your agents is up to you.  You can give your agents power over a particular transaction or more general power over all your affairs.  For further information on Powers of Attorney, please see the “Questions and Answers about Powers of Attorney” below.

Health Care Proxies

Health Care Proxies designate an agent to make health care decisions for you, in the event you cannot make them for yourself.  Your agent may not make decisions for you if you are conscious and able to communicate your wishes to medical providers.  Your agent can make life-ending decisions regarding the withdrawal of artificial hydration or nutrition only if your Health Care Proxy indicates your agent knows your wishes concerning those decisions. For further information on Health Care Proxies, please see the “Questions and Answers about Health Care Proxies” below.

Living Wills

Living Wills, in contrast to Health Care Proxies, do not designate who you would like to make your health care decisions, but are expressions of your wishes regarding the nature of your medical care.  Living Wills can address your desires on important issues like whether you would like artificial hydration and nutrition in the event you have no real expectation of a decent quality of life due to an accident, illness, or other condition.  For further information on Living Wills, please see the “Questions and Answers about Living Wills” below.

Questions and Answers About Wills

What happens if I do not have a Will?

If you do not have a Will, the New York laws of descent and distribution determine who will be left your property, unless you have directed that it be distributed by Trust or by other non-probate means.  The New York Laws of descent and distribution may leave your property to family members who you may not want to benefit from your estate.  Having a Will puts you in charge and allows you to determine who receives what from your estate.

Can I choose a Guardian for my children in my Will?

Yes.  In fact, if you have minor children, it is very important that you have a Will so you can provide who will act as Guardian if you are not around to take care of your children.  Having a Will also allows you to set up a Trust for their education and other important needs.

How does a Will become valid?

A Will must be signed before two witnesses and you must declare the document as your Will before those witnesses.  After you request them to do so, the witnesses must also sign the Will.  It is highly recommended that a qualified attorney supervise the signing of your Will to ensure it is done properly and the Will is therefore valid.

Do I need to keep my Will in a safe?

At O’Connell and Aronowitz, once your Will is signed, we keep the original in our Will safe.  You will receive a copy of your Will, which is marked with the location of the original.

What does the Executor do?

The Executor sees to the administration of your estate, by hiring an attorney to seek the probate of your Will in Surrogate’s Court.  Once the Court grants the Executor authority, he or she can work with the estate attorney to ensure your wishes are fully carried out.

Can I change my Will?

Yes.  As with the original signing of your Will, it is highly recommended that you work with a qualified attorney to ensure the modification of your Will is properly done and therefore valid.

Questions and Answers about Trusts

Are there different types of Trusts?

Trusts come in many different forms and serve multiple different purposes.  Whether a trust is right for you depends on your particular circumstances.  Here are some examples of different types of trusts.

What is a Revocable Trust?

A Revocable Trust holds property for you during your lifetime.  You can revoke the trust and take back ownership of the property at any time that you choose.  Revocable Trusts are sometimes used in the place of Wills in order to avoid the probate process.

What is an Irrevocable Trust?

An Irrevocable Trust cannot be revoked by the creator, but it allows the creator to have certain rights to the property transferred into the Trust.  For example, an individual can transfer her house to an Irrevocable Trust and retain the right to reside there as long as she lives.  Since the Trust is irrevocable, however, she cannot later reacquire the house, sell it, and keep the profits.  Irrevocable Trusts are often used in Medicaid planning because anything transferred into an Irrevocable Trust five years before a Medicaid application is not counted as a resource of the Medicaid applicant.

What is a Special Needs Trust?

Special Needs Trusts (SNTs) come in two different types:  a First Party SNT and a third party SNT.  A Third Party SNT can be set up for the benefit of a disabled person by a third party.  For example, a father may set one up for his disabled child in his Will, so that money will be available for the child’s care after the father’s death.  A Third Party SNT does not affect the eligibility of the disabled child for governmental benefits, such as SSI or Medicaid.  One of the advantages of the Third Party SNT is that the principal of the trust can be left to other family members after the disabled person passes away.

A First Party SNT is similar to a third party SNT in that it does not affect the eligibility of a disabled beneficiary for governmental benefits.  In contrast to a Third Party SNT, a First Party SNT is set up with the disabled person’s own funds – sometimes from the proceeds of their personal injury settlement.  In addition, funds left in the trust after the disabled person’s death must be used to pay off any lien Medicaid has for providing medical care during the disabled person’s lifetime.

Questions and Answers about Powers of Attorney

Do I need a Power of Attorney?

Yes. If you do not have a Power of Attorney and you become incapacitated, in order for a friend or family member to be able to handle your financial affairs for you, they would have to seek to be appointed as the Guardian of your Property.  The guardianship process is expensive and can be contentious.  It could also result in someone being appointed to handle your financial affairs whom you would not have wanted.

Who should I pick as my agent?

People generally choose their spouse or a trusted family member or friend. You may also choose a successor if your first agent is unavailable. You may also pick more than one person to act at one time, however, you must choose if they need to act together or can act separately.

Can I revoke my Power of Attorney?

Powers of Attorney are revocable at any time. You should seek legal assistance to make your revocation effective, because a financial institution may still honor your Power of Attorney if they have not received proper notice of its revocation.

Does my agent have to sign the Power of Attorney?

Yes, for the agent to have the ability to act, they must also sign the Power of Attorney. The agent’s signature is an acknowledgment that they understand that they must act in your best interest.

I have a Power of Attorney from ten years ago—is it still valid?

As long as the Power of Attorney was properly executed on a valid form at the time, the Power of Attorney is still valid today. You should consider doing a new Power of Attorney, however, because the statutory form changed in June 2021, and the new form is more generally recognized by financial institutions.

Questions and Answers about Health Care Proxies

Do I need a Health Care Proxy?

Yes.  You need a trusted person to be your voice in the event you are unable to make your own health care decisions.  Any person over the age of eighteen (18) should appoint a health care agent.

How do I choose an agent?

Your agent should be someone you trust, for example a spouse, other family member, or trusted friend.  You should choose someone that you believe will adhere to your wishes and instructions.  A successor agent should be chosen in the event your primary agent is unable to act for any reason.  It is imperative to discuss your wishes regarding your care, clearly and in detail, with your agent.

Can I revoke my Health Care Proxy?

Yes. A Health Care Proxy does not expire (unless you have provided for an expiration date in the document) and continues as valid until you revoke it.

How does a Health Care Proxy differ from a Power of Attorney?

A Power of Attorney allows an agent to handle your financial affairs for you, but does not allow them to make health care decisions.  A Health Care Proxy allows your agent to make health care decisions, but does not allow them to make financial decisions.

What is the difference between a Living Will and a Health Care Proxy?

A Living Will is a legal document that specifies your wishes regarding your medical care.  A Living Will does not designate an agent, but can provide important guidance to your Health Care Proxy agent when decisions have to be made regarding your health care.  A Living Will can be a separate document or can be integrated into your Health Care Proxy.

Questions and Answers about Living Wills

Do I need a Living Will?

If you do not have a Living Will, the decisions made regarding types and length of treatment given to you may become a dispute between family members and doctors, and could result in the need for judicial proceedings to determine your wishes.  There is no way to be sure these decisions will be consistent with your wishes.  Having a Living Will helps ensure that you have made clear your wishes for the decisions made regarding your medical care.

Do I need a Living Will if I already have a Health Care Proxy?

A Living Will is different from a Health Care Proxy.  It does not appoint an agent to make your decisions.  It serves as a way to express in greater detail the types of decisions you would want the Agent designated in your Health Care Proxy to make.  The Health Care Proxy is a document specific to New York State and therefore may not be honored in another state.  However, most states have Living Will Statutes, and so a Living Will may be honored in another state.  In addition, a Living Will can serve as “clear and convincing evidence” of your wishes, making it unnecessary for a hospital to involve a judge in order to determine your wishes.

How does a Living Will become valid?

There are no formal requirements for executing a Living Will.  It is suggested that to be sure the Living Will constitutes “clear and convincing evidence” of your wishes, you should put your desires in writing, and sign and date the document in the presence of two witnesses and a notary.

Should I keep my Living Will in a safe?

An original Living Will need not be kept in a safe.  But, it should be kept in a safe and accessible location.  Duplicate originals or copies of your Living Will should be given to your Health Care Proxy Agent, the Successor Agent, and your physician.

Can I change my Living Will?

Yes.  A Living Will can be revoked, altered, or amended at any time.

Estate Planning in General

The details of your estate plan and the documents you need to put it into effect is something you should discuss with an experienced estate planning attorney.  Our estate planning attorneys are well versed in the use of all estate planning documents and offer a compassionate, knowledgeable, and superior level of personal service.  If you need advice about estate planning, please call O’Connell and Aronowitz today at 518-462-5601.