The Three Documents You Need
Last Will and Testament
A Last Will and Testament controls assets in your own name after you die. It lets you decide who will look after your affairs. If you have minor children, a Will allows you to determine who will take care of them, and who will manage the money you leave them. Without a Will, the Court and the law will make the decisions for you and the end result could be very different from what you desire.
Power of Attorney
If you are unable to manage your own affairs, a Power of Attorney form gives your chosen Agent the authority to handle your financial affairs, including banking and dealing with your home. This power terminates upon your death.
(Health Care Proxy/Living Will)
An Advance Directive appoints another person to make health care decisions on your behalf if you are unable to, and tells your doctors your wishes if you are terminally ill.
Why Do I Need a Will?
A Last Will and Testament will ensure that you decide who gets your money and when they are to receive it. More importantly, it lets you decide who will be the Guardian of your children, if both parents are gone, and who will be the Trustee, to handle their finances. Many parents elect to put money in trust for their children, and release only the amount needed for health, support and education. The full value of the trust is then given to the children upon an age (or ages) that you determine, when they are mature and more likely to spend the money wisely. If you do not have a Will your property is divided according to the Intestacy Laws of New York and you have no say in the matter. If you are married with children, your spouse will only get one-half of your estate – the other half will go to your children, with a Court-appointed guardian who will get paid out of your estate. If you do not have a Will, the Courts will make the decisions regarding custody and administration which may leave family members fighting over your children and harming relationships, not to mention the cost to your estate.
How Do I Know If I Need to Change My Will?
Simply having an estate plan isn’t enough – you want to update it as the need arises. An estate plan should be updated every five years, as you review changes in your financial situation and estate planning goals. Laws change as well, so a will that was fine five years ago may be totally wrong and outdated now.
You should also update it whenever there is a change in your family or if there is a change in your relationship with the people that you have chosen to protect your family (i.e. the Guardian and Trustee).
Do I Need a Trust?
Trusts can serve different purposes – they can protect assets from Medicaid, or make sure that your children are taken care of. For many families, a relatively simple trust is incorporated into the Will to provide for minor children. However, depending on your individual situation and the needs of your family, a more complex trust may be warranted.
For some families, a Special Needs Trust may be necessary. Special Needs Trusts are particularly important if you have a child that receives government benefits – a wrongly-worded document could make it difficult for the individual to qualify for or continue to receive benefits. Special Needs Trusts provide a safety net if the individual ever needs help, and can also ensure that the individual will have a higher quality of life than could be afforded solely on government benefits.
Why Do I Need an Attorney?
Using an attorney means that an expert is preparing your documents for you and ensures that the results you are looking for are what you will get. Every situation and family is unique; you need someone who knows the questions to ask and what the answers mean for your goals. It is becoming easier every day to find forms, either for free or through a paid service, on the Internet. So why do you need an attorney? Because on the Internet there is no one to correct a mistake.
Between 70 and 80% of all people who use fill-in-the-blank Wills do it incorrectly. These are mistakes that will not be found until after your death and you will no longer be able to explain what you meant or fix it. With an attorney, these mistakes can be prevented.