2009-02-27 / Columnists

Spotlight on Elderlaw

Basic Planning Can Protect You & Your Loved Ones

It is a common occurrence in our practice for clients to come to us in the "eleventh hour"- when Mom, Dad, Aunt, Uncle or Wife needs care because he or she is incapacitated, and no planning or documents have been done in advance. Some clients come to see us because their relative has died without a Last Will and Testament, and without avoiding probate. While no one likes to think about the unpleasantries of illness, or mortality, we cannot avoid these things happening by ignoring them. Thousands and thousands of dollars, and unnecessary added stress in situations already chock-full of angst can be avoided by planning ahead. Without proper planning done ahead of time, we have encountered families that had to pay the nursing home bills out-of-pocket, families forced to watch loved ones suffering while guardianship proceedings were dragging alongwhich could have been avoided with a simple power of attorney or health care proxy form. Still other families were forced to sell real estate to pay estate taxes because no estate planning had been done; others whose deceased relative could have avoided probate-forced to pay legal fees, and to wait for their inheritance until the probate process was completed-months, sometimes years. These unfortunate situations are the reasons it is so important to think about executing some basic documents, review your beneficiary designations and titling of your assets, and keep your important documents readily available and organized to avoid your family being in similar circumstances.

A Power of Attorney is a document that enables you, as the "principal" to name one or more representatives to make financial decisions and transactions for you. If you are married, your spouse can be your representative. If you have adult children whom you trust, you may want them to be your representatives along with your spouse, or as alternates, so that if your spouse were unable to act for you there would be someone named who could. Be aware that the power of attorney is a very powerful document, and you should not name someone as your agent unless you trust that person implicitly. A valid durable power of attorney does, however, preclude the necessity for an expensive, lengthy guardianship proceeding to access an incapacitated individual's assets. You should have an attorney prepare the Power of Attorney for you, to make sure it is properly drafted and executed to avoid any delays if your agents ever need to use it. You should be aware, the laws are being changed with regard to the requirements and execution of the Power of Attorney, and the changes will be effective sometime this year.

The New York State Health Care Proxy enables one to select one agent and one alternate agent to make medical decisions, and access medical records in the event they are incapable of doing so themselves. This form can also avoid guardianship proceeding, and enables the persons of your choice, to whom you have previously made your wishes known, to make important medical decisions for you. A Living Will is a document that provides specific instructions for your health care proxy in the event of certain circumstances (such as terminal illness with irreversible conditions).

A Last Will and Testament is a written document, executed under the laws of the State of New York, that details how you want assets held in your name alone (probate assets) to pass. The Will also allows you to pick the person you want to be in charge of carrying out the distribution of the assets. You can name guardians to take care of any minor children, and you can name guardians to be in charge of the children's assets as well. If you die without a Will in New York State, your assets pass in a certain order of priority. If that's not what you want, you can change that order in your Will. For example, if someone should die without a Will, leaving no close relatives the State of New York could be entitled to the estate. With a validly executed Will, that individual could have named more distant relatives, close friends, or even charities to inherit. A Will has to be executed according to the specifics of the law in New York State-therefore you should have an experienced attorney draft and supervise the execution of your Last Will and Testament. While it's a good idea for everyone to have a Will in place, it's best if possible to title assets so that probate and the related time and expense can be avoided. Assets can be titled in a variety of ways and avoid probate-it's best to review your assets and how they are titled at regular intervals with an estate planning attorney in conjunction with your accountant or financial advisor.

Finally, keep it simple and organized for your loved ones-let them know where all of your important documents are kept. Keep all your account information in order. Make several copies of important personal documents, such as your birth certificate, marriage certificate, death certificate of spouse, divorce papers, social security card, health insurance cards, deeds to any real property and military discharge papers. If these documents cannot be located for example at a time you need to apply for Medicaid, it can result in delays even if you are otherwise eligible. Keep the last five years worth of all financial records including tax returns. Review your important documents with your attorney at least every few years. Review them more often if there is a change in your family circumstancesmarriage, divorce, birth, or death.

Ms. Brady or Ms. Marshak can be reached at 718-945-7777 or 718-738- 8500.

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