Over the past few years the world has become an unpredictable place. It’s during these uncertain times that many people start to think about planning for the unexpected in their life. There are several things that one should consider when planning for their future, but the most important are typically how they want their assets distributed, and how to handle their medical care in the event they become incapacitated. Preparing for these two vital aspects of one’s future is typically referred to as having an “estate plan.”
Many options exist for anyone looking to create an estate plan for themselves or their loved ones, however which service and legal product is best for you will depend on your specific plan and life circumstances. An experienced attorney will be able to determine which pathway is best for you after speaking with you about your life right now and your goals for the future. The information provided below describes the common estate planning tools attorneys will use in crafting your specific estate plan.
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Last Will and Testament
A last will and testament lays out instructions for how to distribute one’s assets upon their death. This document is what most people think of when they are thinking of creating an estate plan, and it will in fact cover the estate planning needs of most people, at least when it comes to their assets.
Creating a last will and testament requires a person to gather all the information they have about their current assets and liabilities, and to decide how they would want those assets to be distributed if they were to pass away. This document also lays out who will be responsible for administering the estate, as well as any trusts that might need to be set up to manage the inheritance of a minor or other person requiring assistance in the event they are not able to manage their own finances.
Very importantly, a last will and testament is THE ONLY way parents in the State of New Jersey (and New York) can designate a guardian for their children should both of them pass away at the same time. If parents do not designate a guardian and something happens to them, the children’s guardian will be determined by the state through its court system. This can result in a messy affair and outcome that can–and should be–avoided.
The bottom line is that everyone over the age of 18 should have a last will and testament.
There are certain situations where a person may benefit by moving their assets into a living trust rather than just using a last will and testament. Most commonly, this is done to avoid the probate process and keep one’s assets private. It may also provide tax savings in certain situations.
Using a living trust allows individuals to move their assets into a new entity ahead of their passing, and then the new entity (the trust) will distribute the assets accordingly as laid out in the trust documents.
Living trusts are excellent tools for some high net worth individuals to avoid certain taxes, but for most people the tax savings is minimal. They also have the benefit of mostly avoiding probate (however anything not in the trust at the time of death will still need to go through this process). That being said, living trusts can be complicated to set up, and they require constant administration by a trustee while they are active. Before deciding to pursue this route, it’s smart to speak with a qualified attorney who will be able to determine if the benefits of this method of estate planning are right for you.
Durable Power of Attorney for Healthcare (Healthcare Proxy)
Setting up a plan for how your assets will be handled upon your death is one essential element of estate planning, but it’s not the only thing you need to address. Unfortunately as we age, many of us will encounter scenarios where we become incapacitated due to illness, but decisions about our future care and treatment will still need to be made.
Who will make these healthcare decisions for you? Either you will need to designate someone ahead of time through the use of a durable power of attorney for healthcare (or healthcare proxy), or the decision will be left to your loved ones to make, usually at the hospital, and always while under the extreme duress of dealing with an ailing loved one.
Don’t let this happen to you. Setting up a healthcare proxy is a very straightforward process, however it does require that you give thought to certain things that you may not have considered before. Our attorneys can guide you through the process of choosing and officially designating someone to act on your behalf in the event you require medical treatment, but are unable to make these decisions for yourself.
You have a last will and testament, so your plan for handling your assets is set. You’ve spoken with an attorney and decided on a healthcare proxy to make medical decisions for you in the event you are unable to do so. These are two very important estate planning issues. But how do the people you designate know what to decide?
What if the treatment is uncomfortable, painful, or permanent? What if you’re in a vegetative state and unlikely to return to consciousness? What if your family disagrees with your healthcare proxy about the decisions they have been tasked with making?
We’ve seen many of these types of situations play out. These are real-life questions that many have faced, and the best way to address them is through the use of a living will. A living will is a document that lays out your thoughts and wishes regarding your healthcare in the same way a last will and testament lays out your wishes as to how your assets should be distributed.
Anyone that has designated a healthcare proxy should create a living will to give to that person and their loved ones so that everyone is on the same page when it comes to how this person should be treated with regard to their healthcare. Our attorneys will guide you through the questions you need to ask yourself before creating a living will, and then draft the document according to your wishes.
Should I Hire an Attorney?
There are several options for anyone looking to create an estate plan, including online wizards, state templates and forms, and of course, through the use of an experienced attorney. The question you need to consider is: Which method is best for you?
This question can only be answered by someone that has an understanding of your estate and your goals with regard to your assets and healthcare. At Rosenblum Law we offer our clients a comprehensive estate plan solution that is tailored to their specific needs without going over the top with complex legal solutions that might not necessarily suit a client’s needs. We offer flat-fee pricing that will accommodate most people’s needs, as well as other options for those with more complex estates. Call us today for a free consultation and get started toward having the peace of mind that comes with a well-thought-out and properly drafted estate plan.