Must-have Documents:

  • Power of Attorney (at least for banking) and a Living Will and/or Health Care Proxy. Both Documents will save money and grief.
  • A simple Will to distribute assets and appoint guardians for minor children.

Retirement Planning:

  • Planning for distribution of money, stocks, bonds, Real Estate and Retirement Accounts (401K, Roth, etc.).
  • Possibly receiving government benefits because of the cost of medical and nursing home care: SSI and MEDICAID; receiving inheritance, gifts, and compensations, while preserving the benefits.

1. Wills.

  • A will (Last Will and Testament) is a set of instructions on how you want your property distributed.
  • A will can precisely direct who gets what property, and even when and for how long if you have a testamentary trust in the will. You can appoint an executor in your will to administer your estate.
  • You need a will to distribute your property and your wealth the way you want.
  • Without a valid will, state law governs the distribution of your property. Your relatives will have no say in who will share in the estate and in what proportion.
  • Without a valid will, a court will appoint an administrator to oversee the distribution of your property.
  • People who die with no direct or apparent heirs risk their entire wealth and property passing to the state.
  • A will sometimes helps avoid fights over inheritance among beneficiaries because it shows the intent of the person who signed the will.
  • Everyone should have a will to express their wishes regarding the distribution of their property, to ensure that their loved ones will be taken care of.
  • A good rule is to update your will (1) at least every five years; (2) when federal or state tax laws change; (3) when events occur that affect the distribution of your wealth and property, such as births or deaths of family members; (4) or when your wishes regarding your property distribution change.
  • A Living Will is a set of instructions regarding your health care that you want carried out should you become incapacitated and unable to make decisions. A Health Care Proxy is a medical “power of attorney” that appoints an agent for making medical decisions if you are unable to make them.

2. Trusts.

  • Trusts are established to protect and distribute property and for the management of assets. Trusts are more complicated than wills because they rely on many federal and state-specific laws, have a lot of variations and involve federal and state taxation issues.
  • Trusts and estate planning are frequently used to minimize the tax impact of passing property and wealth to heirs.
  • Trusts can also sometimes be used to minimize the tax impact on you during your lifetime: for example, by making a gift of property to your beneficiary during your lifetime, while reserving a “life estate” for yourself, or the right to use the property until your death.
  • Examples of trusts include trusts for money (BERT, Dynasty and Legacy trusts), stocks, bonds, IRA funds, houses (QPRT), life insurance, and many other types of property. You can even pass a business through a trust.
  • Reasons to have a trust include (1) to protect your children from bad money management decisions; (2) to avoid will probate; (3) to vary benefits and beneficiaries; or (4) to protect beneficiaries from creditors and divorcing spouses; (5) to accumulate capital tax-free; (6) to plan for Medicaid benefits; and (7) to avoid state estate taxation.
  • You don’t need to have a lot of property or wealth to take advantage of a trust: some types of trusts are funded with the proceeds of a person’s life insurance policy.
  • Trusts can be revocable or irrevocable. They provide different levels of protection, flexibility and tax advantages. Irrevocable trusts generally cannot be changed, although sometimes updates can be made. Revocable trusts can be changed or updated.

3. How and when do I start Medicaid planning?

  • Ideally, at least five years before you are planning to apply for Medicaid in New York.
  • Using careful planning, you can qualify for Medicaid benefits to provide for your hospital and long-term health care, including nursing home or home care, if you are over the age of 65 or disabled.
CategoryEstate Planning

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