Wills & Estate Planning
Everyone should have a will. A will conveys a much larger message than who gets what. When you write a will, the document tells your loved ones that you have actually thought about them and taken their needs to heart when you can no longer provide for them. A will provides mental peace of mind for your survivors that its provisions are how you want things to be. When you die without a will, your belongings pass through the intestacy laws. Typically, that order is as follows: your spouse (but not your unmarried domestic partner); your children; your parents; and then your siblings. Your survivors will never know if that is how you wanted your assets distributed by the intestacy laws or if someone "just got lucky." These types of open, unanswerable questions often affect people for the rest of their lives. With a will, your loved ones will not wonder about how you feel about them.
Example: Client B and his domestic partner had been together for over 30 years. Client B brought me what he (and his partner) thought was a valid will protecting Client B, because all of the assets were in the partner’s name.
I realized that the will was defective, and that the $3 million estate would not be distributed to who was supposed to receive it. I drafted and oversaw the execution of a new will that met the wishes of Client B and his partner. Shortly thereafter, the partner died.
An immediate crisis sprang up because there was no cash to operate the rent-stabilized apartment house, and the new will was bitterly challenged by two wings of the partner’s family.
I successfully negotiated a sale of the apartment house, funded the estate with the proceeds, defended the will, retrieved assets in Switzerland and Germany and thus, preserved the lifetime financial security of Client B.
Most people want simple wills. A simple will, generally, is considered to be a will that leaves one or two items to specified beneficiaries and then the rest to one beneficiary with no strings attached (as in a testamentary trust). Typically, simple wills do not involve any proactive tax planning devices. Simple wills are generally not expensive compared to other legal services and provide the message that a will sends to your beneficiaries.
If you want a simple will, please do not "do it yourself" with software available on the market today. First, you will not be around to fix any problems when the will is offered for probate. Further, nothing could be more divisive to your beneficiaries than family members suing each other because someone has something to gain from a bungled will execution. Remember, although your will may be simple, a botched will execution can create tremendous havoc and permanent divisions among your loved ones. No software can properly oversee the execution of your will.
A testamentary trust is a trust that is not established until after a person dies and his or her will calls for establishing a trust. A common purpose of a testamentary trust is to benefit someone or some organization that may not be able to manage its own money. For example, a parent may establish a testamentary trust for their infant child to watch over the child's financial affairs until the infant is of a suitable age. Alternatively, an older beneficiary may not be able to supervise his or her own financial affairs, and thus a trust run by someone else is needed to ensure that the will bequest is properly utilized.
If you believe that a trust would be appropriate, do not forget to consider who the trustee will be. This person or institution will be making very important decisions on behalf of the trust beneficiary. You are trusting the trustee to make the right decisions for you and your beneficiaries. Consequently, your choice of a trustee is as important as deciding the beneficiaries of the trust.
Inter Vivos Trusts
An inter vivos trust is a trust established during the lifetime of the donor. Inter vivos trusts are typically used as a tax planning device to minimize future estate tax obligations, or help a beneficiary who is unable to manage the financial benefits of the trust's assets alone.
Health Care Proxy
A health care proxy is a document that allows someone of your choosing to make health care decisions for you if you are unable to do so yourself. I highly recommend health care proxies for unmarried individuals because your next of kin is not always the person you would like making your health care decisions. The document is also very flexible, unlike the living will, and can give your health care agent the ability to make reasoned decisions on the advice of your doctors. In addition, you can also restrict your proxy's ability to take certain acts that you feel strongly about because of your spirituality, prior experience or other personal reasons.
A living will is a static document that provides instructions to your doctors regarding the lengths you wish them to go to in maintaining your life. I do not generally recommend that clients have a living will because there can be unforeseen consequences to your wishes. For example, suppose a client assuming that he might have a heart attack executes a living will that prohibits using artificial means to revive his heartbeat. Instead, he is hit by a taxicab and his body goes into shock. Should life sustaining methods be employed? The living will implies that the client should not be revived, but I would be very concerned that my client would want to be revived in such a case.
A living will can never anticipate all the possible events in life. Thus, I believe it inadequate protection for your needs. The health care proxy is a far better method to protect your decisions when you cannot do so yourself.
New York law allows you to specify who is in charge of your final arrangements as well as specify the arrangements you want to occur, which can be in a free standing document or in a will. I prefer them to be in a will to underscore to everyone that this is genuinely your last wish.