Estate Planning is the process by which a person tries to optimize the use of their assets so as to allow them to grow, keeping controls over those assets while the person is alive and then provides for the orderly disposition of those assets at death or upon the advent of a physical or mental disability. A person need not have a large estate in order to need an estate plan. Anyone who has even a modest amount of property, either real or personal, and certainly anyone who has minor children, should discuss an estate plan with their attorney, financial advisor and accountant and should study the various reference resources available at the public library and elsewhere to determine what will happen to their property in the event of their disability and/or ultimate death. It is also very important to plan for what would happen to minor children, should the parents die.
Although people generally relate the term estate to their death, an estate plan also deals with issues related to the care of the person while living. In the area of health care concerns, for example, one might feel the need for a living will, which is simply a declaration that in the event the person is so disabled that their life is being prolonged solely by artificial or heroic means, they intend that their life not be so maintained. A health care proxy is another means of achieving this estate plan goal. New York State law permits a person to designate an agent (or proxy) to make health care decisions for them if they are unable to do so. The instructions to the proxy concerning your wishes for your health care in the event of catastrophic illness or disabling disease can be as general or as specific as you like.
Another estate planning tool that relates to issues during the person’s life is a durable power of attorney. This is a very important tool as it enables the person so designated, the “agent”, or “attorney-in-fact”, to deal with the donor’s property as well as almost any other aspect of the donor’s life. A durable power of attorney continues despite any subsequent disability of the donor unless it is revoked or until the donor of the power of attorney dies. A power of attorney can be limited to only a specified number of transactions or to limited types of transactions, for example, to only one real estate or banking transaction or only to insurance matters. A durable power of attorney may also help avoid the need for a Special Guardianship proceeding in the event of a subsequent disability or incompetence of the donor. This proceeding requires Court approval and is both expensive and time-consuming. It can be additionally burdensome if contested by other family members.
In summary, although an estate plan generally deals with the disposition of assets upon death, a comprehensive estate plan incorporates various tools which will also provide for the care of the person and their assets during life.