Getting Started with Estate Planning

Willby Michelle Shagenov, Esq. 

Over the years, I have had numerous clients who avoided estate planning until they faced a health emergency or another crisis. When I asked them why they put off estate planning, I heard varied responses; including the assumption that estate planning is only for the wealthy and the elderly.

However, the reality is that everyone needs a basic estate plan, particularly those people who face a chronic illness like cancer.  A basic estate plan ensures that YOU make the important decisions about your medical care, your financial affairs, and your family’s future.  If you fail to plan or plan inadequately, a third party may be appointed by a judge to make these decisions for you and your family.

Each person’s plan is different and depends on his or her own unique life circumstances. The first step in estate planning is to reflect on your needs, values, and lifestyle.

Here are some questions and tips to get you started:

1. What are your values and beliefs? What is most important to you? Estate planning documents require you to make decisions about your medical and end-of-life care, donation of your organs, your funeral wishes, and inheritance of your assets.  Your decisions will depend on your values and beliefs.

2. Inventory your assets.  What do you own? Your assets include bank accounts, investments, insurance policies, real estate property, vehicles, jewelry, collections, and on-line accounts.

3. Review your financial documents. Do you own any of your property jointly with another person? The distribution of some assets is not covered by the terms of a will. Jointly titled assets or those with designated beneficiaries (“Payable On Death,” “Transfer On Death,” and “In Trust For” accounts) are known as testamentary substitutes.  Upon an individual’s death, these assets are distributed directly to the joint title holder or designated beneficiary

It is important to review your financial documents, at least annually. This is to ensure that your joint title holders and designated beneficiaries are your intended beneficiaries. A common mistake is the failure to remove an ex-spouse as a joint account holder or beneficiary!

4. Whom do you want to inherit your assets? What are their ages, needs, lifestyles, health situations, income?  Without a will, only your immediate family members receive an inheritance. However, a will allows you to give your property to whomever you choose, including family members, friends, and charity.

Your choices regarding the amount of an inheritance, if any, will depend on your beneficiary’s age, need, lifestyle, and health situation. You may wish to consider a trust for the care of minor children, family members with special needs or chronic illnesses, and pets.

5. Whom do you want to make to medical decisions if you are unconscious or uncommunicative? Whom do you want to manage your financial affairs if you are no longer able to do so? Whom do you want to handle the affairs of your estate? Whom do you want to care for your minor children and/or your pets?  There are three basic estate planning documents: the health care proxy, the power of attorney, and the will. These documents allow you to designate an agent of your choice to make medical decisions for you, manage your financial affairs, handle the affairs of your estate, and care for your minor children and pets. If you do not have these documents in place, a judge may appoint a stranger to handle your affairs.

6. Communicate your wishes. It is very difficult for family members and friends to follow your wishes if they do not know what your wishes are! In addition, you can prevent disputes like the Terry Schiavo case if you clearly communicate your wishes, in writing.

Stay tuned for the next installment on estate planning from Michelle, covering health care directives and communicating your wishes regarding end-of-life care.

Michelle Shagenov is a NY and NJ licensed attorney with a solo New York City based practice, focused on wills, trusts, estates, and guardianship. For more information, please contact Michelle at michelle.shagenov@gmail.com or (347) 618-1454.

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