The Time to Plan is Now!

The New Year provides a perfect opportunity for all of us to make sure our affairs are in order. This opportunity includes making sure that one’s legal affairs are in order. We never know what the future holds; therefore, it is important to make sure that your estate planning documents are in place. At a minimum, one’s estate planning documents should include a Last Will and Testament, Power of Attorney and Advanced Medical Directive. The following is a brief description of each of these documents

A Power of Attorney is a document that authorizes an individual that you choose to assist you with your financial affairs. For instance, should you suffer from dementia the Power of Attorney would allow your agent to address your financial affairs on your behalf. These affairs could include paying your bills, monitoring your investments, paying your taxes, etc. Moreover, the authority given under a Power of Attorney could allow your agent to address estate planning or long term care planning needs (in the event you should require nursing home care).

An Advanced Medical Directive is also an important document for one to consider. End of life decisions are very personal and many individuals have different thoughts regarding their medical care. By listing your medical wishes now, you can have the peace of mind that they will be followed in the event you are unable to communicate them at that time you are ill. Moreover, an Advanced Medical Directive allows you to appoint a friend or family member to verbalize your healthcare wishes to your doctors after having considered those wishes that you have listed in your Advanced Medical Directive.

Finally, a Last Will and Testament is the document that details who you would like to receive your estate following your death. Beneficiaries could include family members, friends or charities. Moreover, in a Last Will and Testament one names an Executor to carry out their affairs after they die. Each individual may have certain circumstances which they want to consider in their Last Will and Testament. For instance, an individual may wish to leave money to their grandchildren. However, that individual may feel uncomfortable if their grandchild were to receive an outright bequest before reaching a certain age. Accordingly, such an inheritance could be placed into a trust so that a grandchild would not have full access to those funds until they reach a specified age.  Moreover, leaving an inheritance to a child with special needs requires careful consideration.

Preparing your estate planning documents now has a number of great advantages. For one, it allows you to maintain a control over your life at a time when you may not be fully able to address matters for yourself. That is, by preparing your estate documents you will have the opportunity to dictate who you would like to assist you in the future and under what terms you would like their help. If you do not have a proper Power of Attorney and Medical Directive, it is likely that a Court will appoint a guardian to assist you with these matters. That guardian may (or may not) be the individual that you would have chosen. Furthermore, by preparing estate documents now there is a greater likelihood of maintaining family harmony. When you detail your wishes in writing it is less likely that family members will contest and argue about matters in the future (though such a possibility certainly still exists). Lastly, preparing estate documents is often much more cost effective than the alternatives. As indicated, if an individual requires assistance and does not have a Power of Attorney or Medical Directive, a guardianship action will need to be initiated with the Court. This litigation is often more expensive, more time consuming and more stressful to one’s family. If one does not have a Last Will and Testament their estate will be distributed in accordance with New Jersey law; this means that one’s estate could be inherited by family members that the individual did not even know.

When contemplating your estate planning needs, it is important to consider estate tax and long term care issues. Various techniques are available to limit the estate taxes that could affect a particular estate. One should also consider those options that might be available to address protecting their estate in the event they require long term care. The monthly cost for nursing home care can reach $10,000; this can quickly deplete one’s life savings. Purchasing long term care insurance may be a prudent consideration for some. Alternatively, various planning techniques exist for those concerned about the potential costs of long term care. Crisis planning to address long term care costs can be difficult; therefore, one should address such possible planning as soon as possible.

Gary Cornick, Esq., who has offices in Somerville and New Brunswick, New Jersey, concentrates in the practice of elder law, Medicaid law, estate planning, guardianship, estate litigation and probate administration.   He lectures to seniors, senior organizations and lawyers throughout New Jersey.  Mr. Cornick is a member of National Academy of Elder Law Attorneys, New Jersey Bar Association, Somerset County Bar Association, New Jersey Bar Association Elder Law Committee, Somerset County Bar Elder Law Committee, and a co-chair of the Middlesex County Bar Association Elder Law Section.  Mr. Cornick can be reached by telephone at (908) 253-0404.  The firm website is located at www.cornicklaw.com.