I get a lot of questions about why estate planning is important during life. Most Westchester County residents think that once they have a Will their estate plan is “good to go” (to see why even this assumption is wrong see some of my previous blogging). For people with more “means” (I.e. larger wallets, such as in Scarsdale, Rye, Chappaqua, etc.), there is an understanding that coordinating gift taxes with an estate plan is important during life. But there is a more important reason that applies to EVERY individual: If you are unable to make your own health care and financial decisions because you don’t have “living documents” you may eventually be in a boatload of trouble.
In New York the living documents an estate planning attorney should draft for you should ALWAYS include a Power of Attorney and Health Care Proxy, and should often (perhaps not always) include a Living Will, Advanced Guardianship Directive, and a Disposition of Remains
In the coming weeks we will be addressing these documents individually, and how they affect the lives of people in Westchester County, Putnam County, Orange County and Rockland County. In the interim, let’s keep it simple:
Power of Attorney: A form allowing you, the “Principal,” to give your chosen “Agent” the power to make financial decisions for you. This power may sound a bit scary if you don’t have a trusted spouse / friend / child to help you with these decisions and financial “errands,” and perhaps more scary if you think your spouse is going to run off to Aruba with his/her paramour using your retirement savings! But if you don’t have a Power of Attorney and have some age related mental illness (such as dementia) or an injury that makes it difficult for you access your funds (such as being in a wheelchair or bed-bound in a hospital and not being able to get to your bank) I promise you that you will be in a very tough spot…and a family member may have to go to court and hold a “Guardianship Proceeding.”
Health Care Proxy: A form allowing someone else to make health care decisions for you. The best example of this situation is if you are under general sedation during surgery, unconscious, or have some mental or age-related illness that affects your ability to make your own health care decisions. Of course, if you are mentally alert your Agent can’t make these decisions, such as your son “pulling the plug” so he can go on a vacation to Bora Bora with his girlfriend using his newly acquired inheritance…from your estate. I’ve actually heard of a person asking if she can do something akin to this to her infirmed mother-in-law…while her mother-in-law was still conscious and alert! (There’s more of a story there, of course, but it sure sounds crazy at face value).
If you are incapable of making health care or financial decisions on your own and do not have a Power of Attorney and Health Care Proxy your family, friends or the State of New York will have to petition the court for what is known as a “Guardianship Proceeding.” This will be discussed in further depth in the coming weeks, but suffice to say that these proceedings are expensive, time consuming, and often gut wrenching. The truth is that having a Power of Attorney and Health Care Proxy can avoid these proceedings, meaning that your health care and financial needs can be managed rapidly and outside of the public’s eye.
Living Will: The legal document that allows you to, in less nuanced terms, “pull the plug.” The Living Will does not name an agent – it allows you to state something to the extent of “If I’m in a brain dead state or persistent vegetative state please cease hydration / tube feeding / cardio-pulmonary machinery, etc.” I know, this somewhat of a “dark” area of discussion, but without a Living Will you may lead a prolonged existence similar to Terri Schiavo.
Advanced Guardianship Directive: The Advanced Guardianship Directive allows a parent / guardian to note his or her decision of a preferred Guardian of their child if they are no longer able to serve in this roll. If a parent has passed away this decision will often be found in his or her Will, but if the parent is still alive the AGD is the relevant document. Keep in mind that (1) one parent cannot typically confound the other parent’s ability to serve as a child’s Guardian, and (2) a court will also as the question “What is in the best interest of the child” when naming a Guardian. That being said, the AGD does place the parent’s desire in writing.
Disposition of Remains: The Disposition of Remains is a relatively new document in New York. It allows a person to state his or her decisions as to their bodily remains. An example may be a person whose parent / child / spouse wants to perform a religious burial, but the individual wanted to have their remains cremated in non-religious ceremony. Again, the topic is somewhat dark, but it does ensure your wishes are adhered to.