It's natural. Who really wants to think about...or talk about their own death?
But you should do more than that. You should plan for the end of your life. And it can be simple.
“Everybody needs three documents," says Gregory Stamm, attorney and estate planning specialist.
Stamm suggests people start with a power of attorney and a healthcare proxy.
"Go to the trauma unit at ECMC on any given day. You'll see a mother knocking on the glass saying she wants to make decisions on medical care. If you are not his health proxy or his power of attorney or both, that doctor can’t even talk to you," says Stamm.
Having these documents filled out and properly executed does not mean you have given up control on what happens to you. Stamm explains they only come into play when you are unable to make decision for yourself.
The third document is some kind of will.
“It’s not for rich people. It’s for everybody who owns something,” says Stamm.
That's pretty much everybody, and yet, most people do not have a will. A 2015 Harris Poll commissioned by online legal service provider Rocket Lawyer found 64% of Americans do not have any form of will or estate plan.
“They think things are too confusing or unaffordable. It didn’t surprise me but this is my life’s work," says Charley Moore, CEO of Rocket Lawyer.
There is something you need to know about wills in New York State. All of them wind up in court. Probate court settles all disputes and oversees the disposition of all wills. By law, wills have to be open for seven months, to provide an opportunity for claims, including unresolved debts. There are cases where wills linger in probate court for over a year.
But there are ways to avoid probate court. Consider establishing a trust instead of a will. Stamm says he recently advise a client to start a trust after finding the client owned property in three states and Canada.
Stamm says, "I told him, 'If you were to die owning these four properties, we would have to do an estate in Canada, Arizona, Florida and Buffalo.” Opening the possibility of having to settle probate matters in four different jurisdictions. Instead, the properties were folded into a trust.
Other probate-avoidance options include:
-Pay-On-Death Accounts; as the name suggests, these accounts hold money until death, then pays the designated recipient directly.
-Name Beneficiaries; for things like like insurance and investments (like IRA's and 401K's) make sure you update where these go should you die.
-Joint Ownership; adding a name to the title of vehicles and property is an easy way of directing gifts.
And then there's the "Die Broke" strategy. This may be particularly important for people anticipating nursing home care, which can cost more than $10,000 a month.
“It is a good thing to die broke, if someone’s in a nursing home because you’re gonna go broke if you don’t make yourself broke," says Stamm, "And the way we do that is to move assets to other family members.”
Stamm says annual tax-free gifts, of up to $14,000 to an unlimited number of people, are allowed by law. This can help spend-down an estate. For seniors with Medicaid coverage, this can reduce pouring your estate into nursing home care.
And whatever you do in terms of estate planning, understand that it will likely require maintenance.
“Life happened and things change. We have kids. We get married. We get divorced. We buy homes,” says Moore.
All these things may prompt a change in your estate plan. Moore recommends annually revisitng your plan with an attorney. A suggestion, do that when tax-time rolls around.
If you're looking for an attorney to help you put together an estate plan, the Erie County Bar Association runs a lawyer referral service. You can reach them at 716-852-3100.