As elder law attorneys, we often meet with clients who are aging or are related to those who are aging. Elder law covers a broad range of areas, including helping the elderly and disabled attain the governmental benefits they need while simultaneously preserving their assets. Another component of elder law is basic estate planning. We typically prepare wills, trusts and advance directives for our clients and their family members.
It is a misconception to think that estate planning is limited to the elderly. One important aspect of estate planning involves preparing wills and/or trusts for individuals, indicating how their assets should be distributed upon their demise. Young people often think they don’t need wills because they have not acquired much in terms of personal wealth. If an individual owns any assets that do not have a named beneficiary and then dies without a will, those assets will be distributed in accordance with state law - which might not be what the person intended. For example, if John has a long-term partner whom he never married and John unexpectedly dies without a will, his assets will pass to his living parents, completely bypassing his surviving partner. If John has no living parents, his assets would pass to his siblings - even if he hasn’t spoken to them in years. Preparing a last will and testament can avoid some of these unintended consequences.
Young couples with children often make the mistake of thinking a will is not necessary - possibly because they do not own much or because they think their assets will automatically pass to each other if one should die. However, according to New York State law, if a spouse dies leaving a surviving spouse and children, the first $50,000 passes to the surviving spouse and the balance is divided between the surviving spouse and the children. This law often does not comport with peoples’ intentions. Another reason for having a will is that, through the will, an individual can designate the guardian for his or her minor children. Such designation can only be made through a will or trust.
Estate planning is not limited to wills. While a will only goes into effect when an individual dies, there are other documents that are necessary while the person is still alive. These documents are referred to as advance directives and are vital to have in case one becomes incapacitated. Becoming incapacitated is not limited to the elderly. A power of attorney is a document through which one can designate an agent to act on one’s behalf with respect to financial matters if one should become incapacitated. The power of attorney enables the individual’s financial life to continue in a fluid matter and, often, the agent also has the ability to engage in additional planning to preserve the person’s assets. Without a power of attorney, the individual’s assets cannot be accessed and no planning can be effectuated. In such a case, the family or friends will have to resort to guardianship, which involves a costly and protracted legal process.
A health care proxy allows an individual to designate an agent to make medical decisions should such person be unable to do so. Finally, a living will is the document through which one can articulate one’s end of life wishes. The benefit of engaging in this estate planning is that each individual can specifically designate who his/her agents will be. Further, each person can also articulate his/her own precise wishes both financially and medically, in case of any future incapacity.
Death and incapacity are sobering topics. Most people would prefer to avoid these subjects altogether. Our advice is to meet this head on. One should engage in the requisite planning and then enjoy the notion that – regardless of age- one’s affairs are now in order.
Ronald A. Fatoullah, Esq. is the founder of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Debby Rosenfeld, Esq. is a senior staff attorney at the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a partner with Advice Period, a wealth management firm that provides a continuum of financial and investment advice for individuals and businesses, and he can be reached at 424-256-7273.