There are a number of important reasons for an adult in New York to have an estate plan even if they have few assets, including ensuring that a plan is in place for their health and finances if they become incapacitated. For people with significant assets, an estate plan becomes even more important to ensure that those assets are protected and go to the individuals intended.
At minimum, most people need a last will and testament. This appoints someone to act as executor and can appoint a guardian for minor children. Many people use a will to pass assets, but others use a revocable trust. The assets placed in a trust do not have to go through the probate process and can pass directly to beneficiaries. Trusts might also have other uses, such as managing assets for irresponsible beneficiaries. Both of these documents need to complement beneficiary designation forms, which are used to pass such assets as retirement accounts and life insurance.
A durable power of attorney gives someone legal and financial power if the individual becomes incapacitated while a health care power of attorney does the same for medical issues. A living will can address a person’s wishes for end-of-life care. People may also want to consider how to handle digital assets.
An attorney may help a person create an estate plan and determine what documents are needed based on the person’s goals and individual situation. For example, in some cases, a person might need an irrevocable trust. While this type of trust cannot be changed, it is also more powerful than a revocable trust, offering such benefits as protection against creditors. An attorney may also help a person ensure that the estate plan is prepared correctly, which can reduce the likelihood that it will be challenged.