It’s necessary to plan ahead to relieve your family and loved ones of the burden of having to do it for you while they are grieving. Some basic understanding of the legal documents and processes available and a good lawyer can put any fears or concerns to rest.
If you do not have the appropriate legal documents in place at the time of your death, you are considered to have “died Intestate.” The state will then determine how to manage your estate, pay outstanding debts and taxes, and distribute your remaining assets in accordance to the state’s Intestacy laws in Probate Court (in New York, this is called the Surrogate Court). Think of it this way: someone needs to be in charge to settle your affairs upon your death. Unless you specifically name someone to do that, the state will do it for you according to a predefined scheme of succession and will distribute your assets to your closest living relatives, which could be your spouse, children, parents, and/or siblings, depending on your situation.
Last Will and Testament
If you want some say in the matter, you should put together a Last Will and Testament. This is the most basic and least expensive estate planning document that allows you to specify how your assets should be distributed after your death, and can contain bequests of specific monetary amounts, percentages, and/or specific types of property. Those you name as Beneficiaries can include family, other loved ones, and organizations and charities. You can also name the person you wish to act as a Guardian for any dependent children, as well as the person you wish to act as an Executor to manage your estate and affairs after your death, pay outstanding debts and taxes, and oversee the distribution of your remaining assets in accordance with your wishes.
A Will does not keep your estate from going through Probate unless your combined assets are valued at less than $30,000. In these cases, you may be able to utilize a simpler procedure known as Voluntary Administration. For all other estates, a Will must go through Probate so the state can validate the Will and legally authorize the person you’ve named to act as Executor on your behalf. This is also the time when anyone believing they are entitled to some of your assets, or that your Will should not be valid for any reason, can contest the Will.
One way to avoid Probate is to create a Living Trust, which transfers your assets into the name of the Trust while you are still alive. In New York, you can name yourself as the sole administrator (the Trustee) of the Trust, meaning you have full power to determine how your assets should be divided upon your death and allows you to be alter the Trust document itself throughout your lifetime. In addition to being outside of Probate law, a Living Trust can also carry some tax benefits for the beneficiaries, and ensures the contents of the document remains private to the parties involved. In contrast, a Will becomes a public document upon your death.
Trusts are more complicated than Wills and require more time and cost to set up initially, as well as to manage over time. In addition, creating a Trust doesn’t alleviate the need for a Will; you will still need what is called a Pourover Will that states that any assets not explicitly named in your Trust should be “poured over” into your Trust at the time of your death. For many people, a Will is adequate to ensure their assets are divided according to their wishes, even with Probate. To determine if a Living Trust is best for your situation, you should speak with your lawyer and financial advisor.
One common cause of additional strain for grieving families and loved ones centers directly around your wishes regarding burial, cremation and/or other disposition arrangements. Don’t keep your wishes in these regards a secret: tell your family, friends and your lawyer. And don’t leave it up to the memories of different conversations you may have add over the years when you can state it clearly and unequivocally in a legal document.
You can include these wishes in your Will, but if it’s not located and read immediately after your death, your family and loved ones might not read these wishes in time. In fact, the settling of the estate usually happens after the funeral or cremation services. The best solution? Create a secondary, Final Arrangements document that clearly states your wishes regarding what happens to your remains. You can also use this document to appoint someone to help carry out your final wishes. You can use the simple form the state of NY provides online to document your wishes, then sign and date the document in front of two witness, and store it with other documents that will be easy for family and loved ones to locate upon your death.
Living Wills and Health Care Proxies
You may also want to consider creating a Living Will or Health Care Directive to state how and to what extent you want medical health care when you are unable to make these decisions at the time they are needed. This includes information such as your wishes regarding life-sustaining treatments in the event that you are terminally ill or incapacitated.
In New York, you can also create a New York Health Care Proxy, in which you name someone as your agent with explicit power to make medical decisions for you when you are unable to do so for yourself. Unlike a Living Will, a Health Care Proxy does not require that you know the specifics about what medical conditions might arise. Instead, it gives your agent the legal authority to make those decisions on your behalf when you are incapacitated. This document can then also be used to specify your wishes for final arrangements after death and authorize your agent to carry them out, thus eliminating the need to have separate legal documents.
Determining What’s Right for You
At the very least, everyone should have a Last Will and Testament. In addition, a Health Care Directive and/or Final Arrangements document can go a long way to help alleviate some of the stress that your grieving family and loved ones will be experiencing. Everyone’s situation is different. To determine the estate plan that is best for you, you should meet with your attorney to review what Estate Planning tools and documents best meet your own situation and wishes.