All too often around the New Year, many of us feel compelled to make resolutions that are often very difficult to keep. The most notable being that one is going to exercise more, eat healthier, and lose weight. While it is an admirable resolution, it is frequently doomed for failure (trust me, I know!).
The following are four resolutions that can be made and easily, and will ensure your estate and elder law planning needs are in good order, for many new years to come.
If you have executed a Durable Power of Attorney, take it out of the drawer and review it. Check to see if the person you have appointed as the agent is still the person you wish to handle your financial affairs if you are unable to do so. Is that person still in good health and someone you have full faith and confidence in? Please ensure 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 power? Does the agent have the ability to create and fund an irrevocable trust, transfer assets to said trust, as well as to your spouse and other loved ones without any limits? The most frequently seen problem with a standard short form Durable Power of Attorney is its lack of broad gifting powers. This prevents the agent from making transfers to protect the assets of a principal that has become disabled or taken ill. Thus, without these broad powers in the Durable Power of Attorney, the incapacitated person’s family must often commence a guardianship proceeding with the court to obtain the powers 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.
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 number one 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 ($11.18 million per person Federally and $5.49 million in New York for 2019), they are of little concern to more than 99 percent of Americans. However, the exorbitant costs of long-term care, whether it be a nursing home or home care, are real and impactful.
Whether it be considering the purchase of long-term care insurance or having 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 are generally no more than one phone call and one or two meetings away with a qualified elder law attorney.
Review any last wills or trusts you have executed so as to determine that the beneficiary(ies), executor(s), and trustee(s) named therein are still in conformity with your present wishes and 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 one’s grandchild may have a disability. If he or she may be a beneficiary under the term of your last will and/or trust, it might be prudent to consider having said disabled beneficiaries share being held in a special needs trust for them. This would help ensure that the amount inherited by the disabled person does not impact their eligibility for any federal and/or state programs to which they might be entitled.
Last but not least, review your health care proxy to ensure that you have only one named agent and alternate agent. All too often the proxy is executed with two named agents, which is not legally permitted in New York. It is also important that your agent specifically knows your wishes regarding your health care and end of life wishes if you are no longer able to make these decisions. You should have a candid conversation 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.
In sharp contrast to the resolution that one will go to the gym daily and lose weight—which could take hundreds of hours in time and effort, the above stated can be easily accomplished in a relatively short period of time. A handful of hours at the most. If anything, think of it as a welcomed pre-workout exercise!
Anthony J. Enea is a member of Enea, Scanlan and Sirignano, LLP of White Plains, New York. 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-elect 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. Mr. Enea can be reached at (914) 948-1500.