By Debra A. Verni, ESQ.
The answer to this age-old question is, it depends. It depends on what you consider estate planning. It is a safe bet that after you pass away it is too late to prepare a will to dispose of your worldly possessions, but an estate plan is not just a will.
A good estate plan consists of a will, a durable power of attorney, a health care proxy and a living will. When is the best time to create an estate plan? Any time after the age of 18. I know 18 sounds young to be worrying about an estate plan but 18 is a pivotal age. Most parents forget that when their children turn 18 their ability to get information or make health care decisions for their children ends.
Most kids at 18 are off to college. As a parent of a college student, especially one far away from home, you should have your child appoint you as their health care proxy so you can receive medical information and make medical decisions for them if they become hospitalized or need care. Additionally, your child should appoint you as their power of attorney so you can deal with financial aid and any other financial issues such as housing, paying bills etc.
So now that your kids are all set what about you? Do you have an estate plan? I always joke with clients and say that if you don’t have a will, you have a won’t. I won’t ever die, I won’t need to plan, everything will work out fine.
Unfortunately, if you do not prepare an estate plan that gives your family direction as to who you want to be in charge and where you want things to go, could be a mess. Newsflash—if your family does not get along now, they will not get along if you get ill or pass away. The best plan is to have your documents in place and tell the person that is going to be in charge where your documents are or give them the name of your attorney so they know where to find your documents and the attorney can give them direction.
Carefully drafted estate planning documents are not only important when you pass away, but those same documents are potentially even more important should you become ill or cannot make decisions for yourself.
Your family should know what your wishes are as far as medical treatment and end of life decisions. Talking to your family and telling them exactly what measures should be taken should you become ill or incapacitated and being clear and concise in your documents will help alleviate a lot of questions and guilt.
If the person you appoint cannot follow your direction, then you need to appoint someone else. I have clients that appoint their spouse then their children in a pecking order based on age. Choosing your spouse to act alone in your 50s may be a good plan, but we are all aging in place. You may want to make your spouse co-power of attorney with one of your children so if you and your spouse are both having issues your child can step up and take care of things for you.
I also do not recommend naming children in your documents solely based on age. When choosing those who will act for you several things should be considered such as skill set, physical location, time to do the job and if they want to do the job.
Some family members are great with numbers, others are disorganized, but great nurturers and caregivers. I know it is a difficult conversation to have with those you love, but better to find out now that they do not want the “job” then to find out when you need them to act.
What if you have your basic estate planning documents in place and you have spoken to your family? Are you all set? Do you need a trust? A trust is a great addition to your basic estate planning documents but not everyone needs one. For those of you that feel that you are not rich enough to have a trust, not true.
A trust can serve many purposes. A trust can help you avoid probate, protect your assets, protect assets for those who have special needs, the list goes on and on. There are several types of trusts and each one has a specific job. For instance, a revocable trust helps you avoid probate if you retitle your assets into the name of the trust. An irrevocable trust not only helps you avoid probate but protects your assets from creditors (the nursing home) if you retitle assets into the name of the trust. A special needs trust helps to protect assets for those with a disability or special needs.
Which trust is right for you if any? It depends on what type of assets you have and what your specific situation is. Your best bet is if you are thinking about putting together or updating an estate plan that you consult an attorney that focuses their practice in the areas of estate planning and or elder law.
An attorney can review your documents if you already have them, suggest changes and prepare new documents if needed. The worst choice you can make is to choose to do nothing and have a “won’t”. Remember where there is a will there is a relative and where there is no relative there is New York state. Plan ahead because you never know when it will be too late to plan your estate.