Why bother with Estate Planning?

The Facts: I am a widow with modest assets and a small IRA. I have two grown children and two young grandchildren. My friends have been urging me to see an attorney about developing an estate plan.

The Question: Considering the size of my estate, is that really necessary?

The Answer: The short answer to your question is a resounding “Yes”. Estate planning is not just for the wealthy and is not limited to the preparation of a Will. Estate planning touches on everything from Wills, trusts and powers of attorney to healthcare proxies, living wills and spousal waivers. Even if you just want a Will, there are countless issues that you should discuss with an experienced estate planning attorney to insure that your Will accurately reflects your wishes and takes into account your specific circumstances. The reason professional help is advisable is that, for the most part, people don’t know what they don’t know. In other words, a person can fill out a form Will and sign it but, if she doesn’t know what questions to ask or what issues should be considered, she likely won’t know the adverse consequences of her uninformed choices. The end result is an estate plan that does not reflect the goals and wishes of the person, or worse, one that leads to protracted litigation.

To avoid that, you should discuss with an attorney how your assets are titled and whether all of your assets pass will pass under your Will. Assets that are jointly owned with someone else or that are subject to a beneficiary designation are non-probate assets and will not pass under your Will. How such assets are going to be distributed should be taken into consideration when developing an estate plan.

You should also discuss with your attorney whether or not your probate assets will be passed in equal shares to your children. One question that needs to be addressed is whether you want your executor to take into consideration non-probate assets that may pass to your children or loans that you may have given your children when determining the amount of their share. Another is how you want your estate to be divided in the event one of your children predeceases you. ? If you want the share allocated to a predeceased child to pass to his/her children, you should discuss with your attorney the option of including a trust in the Will to protect the assets passing to the minor grandchildren.

Although both of your children would have equal rights to be named administrator of your estate if you were to die without a Will, you should discuss with your attorney what is involved in the probate of your Will and the administration of your estate. If your children do not both live locally, it may be burdensome to have them serve as co-executors. Or perhaps they don’t get along and naming a third party to handle your estate would be advantageous. Discussing these issues is an important part of developing even the most basic estate plan.

As mentioned above, as part of your estate planning you should also discuss with an attorney the benefits of having a power of attorney, healthcare proxy and living will in place. Each of these documents plays an important role in an estate plan by either insuring that your affairs are taken care of in the event you lack capacity or by making your wishes known with respect to medical treatment and end of life care. Your attorney can advise you as to the duties and responsibilities of the agents named in a power of attorney and healthcare proxy. This will allow you to consider possible agents in light of the roles they would assume if named. Discussing this with your estate planning attorney will enable you to make informed choices. If you don’t engage in the process, you are essentially forfeiting the right to choose who will assist with the management of your assets while you are alive and who may be called upon to make life and death medical decisions on your behalf. When asked, most people admit that they want to be the one to choose.

This article first appeared the Times Beacon Newspapers in July, 2019.

Linda M. Toga provides legal services in the areas of estate planning/elder law, probate and estate administration, real estate, small business service and litigation from her East Setauket office.