We are fast approaching that time of year when many of us feel compelled to make resolutions that are often very difficult to keep. The most common are to exercise more, eat healthier and lose weight. While admirable, they are sadly often doomed for failure (trust me, I know!).
Contrary to the above, the four resolutions stated below are easy to keep and will help ensure your estate and elder law planning needs are in good order for years to come:
1. If you have executed a Durable Power of Attorney, take it out of the drawer and review it. Check to see if the individual you have appointed as the agent is still the person you wish to handle your financial affairs if you are no longer able to do so. Is your named agent still in good health and someone you have confidence in? Confirm that you have selected an alternate agent in the event the primary agent can no longer act.
Review the Power of Attorney to determine if the agent is given broad powers to handle your affairs. For example, does he or she have unlimited gifting powers? Does the agent have the ability to create and fund an irrevocable and/or revocable trust, transfer assets to said trust as well as your spouse and other loved ones without any limitations?
The most frequently occurring problem with a standard short form Durable Power of Attorney is the lack of broad gifting powers. This prevents the agent from making transfers to protect the assets of a principal who is incapacitated and unable to handle his or her own financial affairs. If the Power of Attorney lacks the needed gifting powers, the incapacitated person’s family may need to commence a guardianship proceeding with the court to obtain authority to make the necessary transfer. It is an expensive and time-consuming procedure. If you have not executed a Durable Power of Attorney with very broad powers, I suggest you consider doing so.
2. Be proactive with respect to ensuring that you have taken all appropriate steps to protect your life savings from the cost of long-term care. Unfortunately, the cost of long-term care has well surpassed estate taxes as the No. 1 factor resulting in the dissipation of assets being available to be passed to one’s spouse, children and grandchildren for the vast majority of Americans. With the federal and New York estate tax exemptions being relatively high ($11.4 million per person federally and $5.74 million in New York for 2019) they are of little concern to more than 99 percent of Americans. However, the exorbitant cost of long-term care, whether it be a nursing home or at home is both a real and impactful expense.
Whether it be considering the purchase of long-term care insurance or creating a Medicaid Asset Protection Trust to protect one’s house and other non-IRA assets, taking the steps to learn about said options is a lot easier than going to the gym five times per week and not eating any carbs. They will generally not take more than one phone call and one or two meetings with an experienced elder law attorney.
3. Review any Last Wills and/or Trusts you have executed so as to determine that the beneficiary(ies), executors and trustee(s) named therein are still consistent with your wishes and that they are still able to perform the duties of an executor and/or trustee.
It is also not unusual for one to have had a falling out with the person previously named as a beneficiary and/or executor in one’s Last Will. If your relationship has changed, you may wish to consider changing your Last Will.
Additionally, as one’s family grows, the possibility exists that a child and/or grandchild may have developed a disability. If the possibility exists that said disabled or incapacitated child/grandchild will inherit under the term of your Last Will and/or Trust, it might be prudent to consider having said beneficiary’s share held in a Special Needs Trust for him or her. This would help ensure that the amount inherited by the disabled person does not disqualify them from eligibility for any federal and/or state programs they might be entitled to.
4. Last but not least, review your health care proxy to ensure that you have a named agent and an alternate agent. All too often the proxy is erroneously executed with two named agents, which is not legally permitted in New York. It is also important that your agent specifically knows what your wishes are regarding your health care and end-of-life decision making, in the event you are no longer able to make these decisions. You should have a candid conversation with your health care agent as to whether or not you wish to be placed on life support and the conditions that need to be present in doing so or not doing so.
The above stated resolutions can be easily accomplished in a relatively short period of time. A handful of hours at the most! While I urge you to consider healthy eating and exercise, a healthy estate plan is also important to your peace of mind.
On behalf of Enea, Scanlan and Sirignano, LLP, I wish you and your families a Healthy, Happy and Prosperous New Year.
Anthony J. Enea is a member of Enea, Scanlan and Sirignano, LLP of White Plains and a home office in Somers. Mr. Enea is the Past Chair of Elder Law and Special Needs Section of the New York State Bar Association (NYSBA). He is the Chair of the Senior Lawyer Section of the NYSBA. Mr. Enea is the Past President and Founding member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). Mr. Enea is the President of the Westchester Bar Foundation and Past President of the Westchester County Bar Association. He can be reached at 914-948-1500.