Frequently Asked Questions About Estate Planning

What information do I need to give my attorney in order to prepare an Estate Plan?

In the interest of helping you keep things simple and organized, we have a worksheet/questionnaire that we provide free of charge. The questionnaire is in plain English and asks for basic information such as a list of relatives, a list of assets, bank accounts, etc. The information on the questionnaire is designed to be a starting point for more detailed attorney-client discussions.

I’m not rich. Why should I spend time and money on Estate Planning?

Estate Planning is not just for rich people. While large estates may benefit more from tax planning, smaller estates can benefit in several key respects.  First, all people over the age of 18 with capacity in New York can execute a Power of Attorney and Health Care Proxy/Living Will. This ensures that if you become incapacitated, someone you trust has the legal authority to handle your finances and make decisions about your medical treatment. You can also stipulate what type of medical treatment and pain relief you wish to receive (or not receive) in certain circumstances. Without these legal documents in place, your loved ones may need to commence a time consuming and expensive court proceeding in order to get a court order. In addition, a Last Will and Testament can appoint an executor you know and trust to distribute your assets in accordance with your wishes after you are gone. In short, Estate Planning allows you to dictate the type of medical treatment you will receive if you are rendered unconscious or otherwise incapacitated, and it allows you to dictate who receives what assets after you are gone. Also, if you have minor children Estate Planning is an opportunity to appoint a guardian and set up a trust where appropriate.

I did some Estate Planning years ago. Do I need to update it?

Maybe.  It may be prudent to revisit your Estate Plan if any major life events have occurred, e.g., children were born, you were married, you were divorced, you purchased real estate in another state, you accumulated substantial wealth since you last met with your attorney, etc. In addition, the tax laws change periodically so it may be wise to consult with counsel to determine whether your Estate Plan should be updated to get the maximum benefit of the latest tax laws.

Can I set up a trust for the care of my pets?

Yes.  In New York a person can create a trust for their pet.  This type of trust is often used for pets with a long life expectancy, such as a horse, bird or snake, but it can also be used for a typical dog or cat.  The trust ensures a certain level of care for the pet and that there are sufficient assets set aside for the pet’s care.  Any remaining funds after the pet’s death can be gifted to charity or returned to the grantor’s estate.

What is the best way to make charitable gifts?

Depending on the situation, charitable gifts can be made outright. Alternatively, tax-exempt foundations and trusts can be set up.  Each person’s wishes and financial situation is different. Charitable gifts may have tax implications so they should be given careful consideration.

What is a Health Care Proxy and Living Will and do I need these?

A health care proxy simply appoints someone you trust to make medical treatment decisions for you if you become incapacitated, e.g., if you are unconscious after a car accident. The living will dictates whether and what type of medical treatment and pain relief will be provided to you under certain circumstances.

What is a trust and do I need to set one up?

In some cases it may be advisable to set up a trust. A trust is simply a legal entity (similar to a corporation) that is set up to hold assets for a beneficiary (or beneficiaries). The trust agreement appoints a trustee (and backup trustees in case the trustee pre-deceases the grantor) and dictates the circumstances under which the trustee is to distribute assets to the beneficiar(ies). There are many different types of trusts. The two basic types of trusts are revocable and irrevocable trusts.  There is no requirement to set up a trust.  Each person’s situation is different and our goal is to tailor the Estate Plan based on the information you provide about your particular assets and wishes.

How do I appoint a guardian for my children?

In your Last Will and Testament you can specify who you would like to act as your children’s guardian in the event of your death or if you are married, in the even you die simultaneously before your children are 18 years of age.

How do I set up a trust for my children?

Depending on the situation, setting up a trust may be as simple as drafting a trust agreement and conveying property or assets into the trust. For example, a life insurance policy may list a trust as a beneficiary for minor children and the trust agreement may specify the circumstances under which the trustee may distribute cash to children, e.g., upon their 18th birthday, graduation from college, etc.

How much does Estate Planning cost?

We typically charge a flat fee for a basic “wills package” that includes the Last Will and Testament, Health Care Proxy/Living Will, and Power of Attorney.  Most other work is charged on an hourly basis and we can do our best to estimate what those fees will be in advance. We do not start work until you sign a Letter of Engagement clearly setting forth our scope of work and fees.

What happens if I choose not to do any Estate Planning?

In New York, if someone dies without a Last Will and Testament, the State laws of “intestacy” determine how the decedent’s assets will be distributed. If someone becomes incapacitated without a Health Care Proxy/Living Will or Power of Attorney, State law may determine who can make medical treatment decisions, and a Guardianship Proceeding may be necessary to manage the person’s financial affairs.  In short, the State has laws that act as a back stop, however these laws may or may not effectuate the decedent’s wishes, and a great deal of time and money may be spent to obtain court orders in probate and guardianship proceedings, which may reduce the heirs’ inheritance.

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