Most utilized estate planning documents

A basic estate plan consists of a Power of Attorney, Health Care Proxy and Last Will and Testament. Having these documents as part of your basic estate plan will help you identify and address whatever legal, health, or financial issues you might encounter.

Durable Power of Attorney

WE often tell our clients if they have a well written, comprehensive Power of Attorney, we can accomplish (almost) anything needed. A Power of Attorney is an essential document to make sure your property, financial, and/or legal decisions are made effectively and efficiently by the person you trust (known as your agent). It is critically important the attorney preparing your Power of Attorney is aware of the many changes this document has undergone in the past decade, and how to maximize the efficiency and ease of use.  Too often, a new client will come in to our office with a Power of Attorney prepared by a “general practitioner” who does not regularly practice in this area, and critical language will be missing.  Without the authority given in a properly prepared and executed Power of Attorney, your family’s only other option might be a guardianship, which can be a long, public and expensive proceeding.

Health Care Proxy

EVERY person should have a Health Care Proxy.  The Health Care Proxy authorizes an agent (usually a family member) to make decisions regarding your medical care if you are no longer able to decide for yourself.  Also, the agent is designated to represent your wishes, so you should talk to your agent about important health care decisions including artificial respiration and hydration, tube feeding and other end of life decisions.  Hospitals and doctors must follow your health care agent’s decisions as if they were your own.  It can also indicate your intention to donate certain or all organs and tissue.  If you wish to donate organs and tissue.

Last Will and Testament

WE will save the trust discussion for another blog.  Many of our clients do not wish to put their property in trust, and we create a Last Will and Testament to meet the needs of their estate plan. The purpose of the Last Will and Testament is to direct how their estate is to be distributed, who will be the beneficiaries and who will represent the estate, known as the Executor or Personal Representative.  Often, the Last Will and Testament will authorize the creation of Testamentary Trusts, which would be created and funded after their death.  One example of a Testamentary Trust contained within a Last Will and Testament is when the property in the Last Will and Testament may be distributed to minor beneficiaries, and the creator of the Last Will and Testament would wish the property be held until the minor child achieves a certain age. Again, it is of the utmost importance that the Last Will and Testament is prepared according to the laws of the domicile state.  For example, some states require three witnesses, others require two.

Veterans Pension and Aid

Veterans Pension and Aid and Attendance 101

The Veterans Administration pension is not a pension in the traditional sense.  Rather, the veteran’s pension is a monthly amount designed to help the veteran or their spouse who needs assistance at home.  This amount can be used to pay unreimbursed medical expenses such as a home health aide.

To apply for the veteran’s pension, or the enhanced pension (if the applicant is homebound or in need of aid and attendance for daily needs), the applicant or their spouse must be income and resource eligible to receive this benefit. The spouse’s pension is often called a survivor’s pension.  Both the veteran’s pension and the survivor’s pension are tax-free. The survivor’s pension is not available to the surviving spouse if they remarry.

If the Veteran/spouse is housebound or requires the aid and attendance of another person, they could receive additional funds, also known as an enhanced pension. Effective December 1, 2018, if you are a veteran with no dependents, your yearly income must be less than $13,535.00.  If you are a housebound veteran with no dependents, your yearly income must be less than $16,530.00 and if you are a veteran with no dependents and require aid and attendance your yearly income must be less than $22,577.00.

The net worth limits to qualify for pension has increased to a “bright-line net worth” of $127, 061.00 as of December 1, 2018.  This is good news, as it replaces the former variable net worth limitation, which could be altered by certain factors, such as life expectancy and the rate of depletion of assets.  It is hopeful the new bright line net worth limit will expedite pension applications.

Veterans Aid and Attendance and Housebound Enhanced Pensions 102

As discussed in Veterans Pension and Aid and Attendance 101, a veteran may qualify for the aid and attendance increased monthly pension if they meet ONE of the following:

  1. The applicant requires the aid of another person to perform personal care such as bathing, dressing, feeding, bathroom assistance, aid with a prosthetic device or to protect yourself from hazards in your home environment.
  2. The applicant is bedridden due to their disability or disabilities.
  3. The applicant is a patient in a nursing home due to mental or physical disability (there may be a reduction).
  4. The applicant’s eyesight is 5/200 or less in both eyes.

A housebound veteran is defined as an applicant who is substantially confined to your immediate premises because of a permanent disability.

I Don’t Need a Will! – Or Do I?

Aside from the metaphysical question of whether anyone really “needs” something, there are several reasons why someone would conclude that establishing an updated & professionally prepared estate plan: Wills, Trusts, Powers of Attorney, Health care proxies – would be a good decision. Let’s focus for this discussion on Wills. NOT having a Will and passing away with “probate assets” – assets titled in the name of the decedent alone & without beneficiary designations – would result in New York State Law and not yourself deciding who gets your probate estate assets and in what amounts. Dying “intestate” – without a Will – in New York, with a surviving spouse and children, leaves the decision to New York State law, which states that as to probate assets the first $50,000 goes to the surviving spouse, with the balance split 50% to the surviving spouse & 50% to be shared equally by the surviving children. Perhaps that is what you might have chosen to happen – more likely it’s not. A Will allows you to decide who gets what and in what amounts. Another scenario that can result is that your probate assets could go to your underage children. “Underage” could mean whatever you decide it to mean – under 18 years of age, under 21, under 25, under 50 years of age. You also can retain your probate assets in special Trusts to protect a beneficiary from the consequences of receiving the assets – in addition to being too young, perhaps a child has disability issues, or addiction issues, which you feel receiving assets from you upon your death would be best held indirectly for their benefit in a Trust. Or perhaps there is a close relative of yours that you would NOT want to receive any of your assets, or less that they would otherwise receive under New York law. A properly drafted Will can make that decision happen. In summation, a properly drafted Will can make whatever intentions and decisions you have with regard to your probate assets happen. An attorney who focuses on the estate planning practice is the right person to talk about these and other planning issues.