The purpose of this letter is to give you a very brief idea of what is involved in the Estate Planning process and what you should expect from a law office that plans your estate.
As you can imagine, every law office handles Estate Planning differently, depending upon the level of sophistication of the attorney you are dealing with and the philosophy of the office. In some firms or law centers with many lawyers, you may not get the personal attention from the lawyer that originally attracted you to that firm to assist you in planning your estate. You might be attracted by a certain lawyer's experience on the firm's website or at a seminar, only to find out you really won't be working or meeting with that attorney, but will be working with a younger less experienced attorney or paralegal. My biography will give you some idea of my educational background, experience, areas of practice and professional memberships. If you decide to work with me to plan your estate, I will be the one you will be meeting with and working with on a regular basis for all of your meetings and legal work.
In order to advise you properly in planning your estate, an attorney must be knowledgeable in the following areas of law:
An elder law attorney doesn't dabble in these areas of law, but concentrates his or her practice in what has become known as the area of practice of Elder Law, which involves advising clients with regard to all of the above areas of law.
You should be very careful in your selection of the law office that does your Estate Planning work to ensure that you will truly receive a thorough Estate Plan which addresses all of your financial, tax and personal estate planning goals and objectives that you may have for your future and the future of your family.
What you should avoid is a "one size fits all" approach to Estate Planning. You should understand that you are not purchasing a "canned" document or a set of documents, but an individual Estate Plan for the financial future of you and your family.
1. REVIEW OF YOUR EXISTING ESTATE PLAN
The very first thing that your attorney should do is to help you compile a very detailed and complete list of all of your assets, liabilities, income, and expenses.
This information is absolutely critical in determining the assets that you will need to maintain your current life style for the rest of your life, your potential Federal and New York State Estate Tax liabilities, potential probate costs and expenses. This information will also help you to determine if it is desirable or possible to transfer any of your assets to protect them from being wiped out to pay for nursing home costs or uncovered medical expenses.
Your attorney should also review your
existing wills, trusts, powers of attorney, health care proxies, living wills,
deeds, pension and 401 (k) plans, life insurance, annuities, IRA's and the
primary and secondary or contingent beneficiary designations under those
assets.
The secondary or
contingent beneficiaries under your pension and
401 (k) plans, life insurance, annuities, IRA's are critically important in avoiding
probate on these non probate assets, because if your primary beneficiary dies before you die, these non probate assets can end up going through probate to establish who gets them because your primary beneficiary Spassed away before you.
Upon completion of this review, your attorney should be able to evaluate your existing situation and make specific recommendations as to how you would be able to:
The bottom line is that the best Estate Plan you can have is one that accomplishes the above 6 goals, yet doesn't change your current life style or jeopardize your future life style.
2. PREPARING AN ESTATE PLAN
After your attorney has carefully reviewed your financial, personal and health related information he or she is prepared to make specific recommendations with regard to the documents you should execute, transfers that you should consider making and any steps that should be taken in rearranging the form of ownership of your property such as real estate, bank accounts, brokerage accounts, life insurance, etc.
You should know that designing an Estate Plan definitely takes more than one or two meetings. It usually takes me three to four months of regular meetings every two weeks to develop and implement an effective Estate Plan for my clients.
Thereafter, you can expect to review your estate plan once a year or more frequently, depending upon your individual needs or any change in circumstances related to either health, finances or changes in the law. I offer a free 2 hour annual review every year after I do an estate plan. Most law offices will charge you an annual fee just to review the work they have already done for you
If you are only meeting two or three times with your attorney or a paralegal, it may mean that something very important is being over looked.
I have been practicing law for over 32 years and can assure you that the advice and analysis that you receive or don't receive can vary dramatically based upon the education, background, and experience of the person planning your estate. Please do not assume that you will receive the same level of expertise or personal attention from every law office regardless of how much you are paying for your Estate Plan. I think you may find that my office may very well offer you the personal attention that you would like in planning your estate.
3. THE DOCUMENTS
The following documents should be discussed as part of your Estate Plan:
A. Durable Power Of Attorney. A Durable Power Of Attorney names at least two people, usually but not always your children, to act on your behalf and is usually used when you cannot act on your own behalf due to sickness or disability. You should appoint more than one person as your Power of Attorney because you may outlive your Power of Attorney. Not every Power of Attorney is alike and not every office will offer you a specially drafted Durable Power of Attorney that is designed with Estate Planning in mind. Many law offices will provide you with a Statutory Short Form Power Of Attorney, if they provide you with one at all. The Short Form is clearly inadequate to deal with your Estate Planning needs, because it fails to contain the broad estate planning powers that will be needed to protect your assets from probate and nursing home costs, as well as from uncovered medical expenses.
I have conducted continuing legal education classes for lawyers on how to use a Power of Attorney for estate planning purposes. I have drafted my own Durable Power of Attorney which contains language based upon my own experience and recommended materials supplied by the National Academy of Elder Law Attorneys, the Elder Law and Trusts and Estates Sections of the New York State Bar Association. You will find a sample draft form of one type of Power of Attorney, on this website so you can get an idea of the language and powers a POA should contain. You may compare the language in that form to your Power of Attorney, if you have one, but you should never sign a Power of Attorney without the advice of your attorney, because it is a very powerful document. The decision of who is to have your Power of Attorney and what powers you will give them is one that should be discussed thoroughly with your legal counsel, because after you have become disabled, you may not be able to execute another Power of Attorney.
B. Health Care Proxy. A Health Care Proxy is an extremely important document which designates someone to make health care decisions for you if you are not able to make them for yourself.
A hospital or nursing home doesn't have
to allow your family to make health care decisions for you if you are disabled
to the point of legal incompetence and can force your family to go to court to
have a court appointed legal guardian put in charge of your health care
decisions. The guardian may not even be a member of your family. I recently
had a case where a nursing home refused to release a mother's medical records
to her son and refused to release the mother from the nursing home to her son
who had lived with her for 20 years because the nursing home didn't want to
get sued by the mother's other children. Mom didn't have a health care proxy
appointing the son as the person to make her health care decisions. The mother
died alone in the nursing home, before the son could get appointed as a health
care proxy by a court. You should have a Health Care Proxy.
Your
Health Care Proxy should contain language that waives your rights to privacy
under the
Health Insurance Portability and Accountability Act of 1996 (AHIPAA@),
42 USC 1320d and 418CFR 160-164. This will allow your Health Care
Proxies, usually your children, to obtain copies of your medical records
from your Doctors, Hospitals, Nursing Homes, Insurance Companies
and other health care service providers. Without this HIPPA waiver, your
children may have to get appointed by a court to get access to your
medical records, which is extremely expensive. I have never seen a short
form Health Care Proxy provided by a hospital contain this extremely
important HIPPA waiver clause.
C. Living Will. A Living Will is a document that says that in the event you are permanently unconscious or in an irreversible physical condition with no hope of recovery, that you don't want to be hooked up to a machine and kept alive by artificial means such as artificial respiration, tube feeding, etc. to simply prolong your dying.
Many of my clients desire this document for four main reasons:
a. First, if they are going to die, they want to die with dignity.
b. Second, they don't want to run up astronomical hospital and medical bills and wipe out their family's financial resources if they are permanently unconscious and have no hope of recovery.
c. Third, they want to spare their
family the emotional pain of seeing them permanently unconscious and hanging
on month after month or even year after year knowing there is no hope of
recovery.
d. Fourth, they don't want their loved ones to be burdened by making a life and death decision, but prefer to let their loved ones know that they are merely carrying out their mom's or dad's wishes.
I'm sure you have watched with sadness the ordeal of the Terri Schaivo family. A living will would have been critical in avoiding years and years of agony and legal expenses for her family and would have provided clear direction as to what Terri Schaivo wanted to be done in the event of her being in a persistent vegetative state.
D. Wills. Don't be under the mistaken impression that all wills are alike. There are many different types of wills that can be used to reduce Federal and New York State Estate Taxes and manage assets for your spouse and children long after you are gone. The type of will that is the best for you will depend upon many factors, including but not limited to, the size and nature of your assets, as well as your personal family situation. For example, you may have a child or grandchild with special needs, a spouse, child or grandchild that can't handle their own money or children by a previous marriage. You may be concerned about whether your children may get divorced or pass away before you do and what will happen to assets you leave your children if they get divorced, pass away, get disabled, get sued, have judgments or liens against them, or go bankrupt..
It amazes me how often clients are not even
made aware of the income, gift and estate tax ramifications of a transfer of
their assets. Obviously if your advisor is not knowledgeable in the tax law, you
and your children can get some very unpleasant surprises. The subject of
Trusts is very important so I have created two brief articles on the website for
Revocable Trusts and Irrevocable Trusts. I hope you find them informative.
I have tried to take some of the mystery out of the Estate Planning process in this short letter, but if you would like some more information, I am pleased to offer you a free office conference to discuss the entire Estate Planning process and how I can help you plan your estate.
Please feel free to give me a call.
Warmest personal regards
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