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What Is an Estate Plan?

real estate plan on business folder showing buy a house concept

{Read in 3 Minutes}  As a Trust and Estates attorney, I frequently write estate plans for people. I feel like I say that quite a lot in my blog, but I’ve never defined that term. So here, several years after starting the blog, I thought we should have an article explaining what an estate plan is.

In its simplest definition, an estate plan is an action or series of actions that a New Yorker can take to determine who inherits assets upon their death. Not everyone who has a Will thinks that they have an estate plan, but they do because a Will accomplishes just this purpose. The Will states which beneficiaries will inherit, which assets (such as real property), retirement accounts, intellectual property, tangible personal property, etc., and who will be named as the Executor to be in charge of administering your Estate.

However, a Will is not the only document that does this. Several types of assets may pass outside one’s Estate and automatically vest in the beneficiaries named within. This might include things like a joint bank account, life insurance policy, retirement accounts, or any sort of asset that has a beneficiary designation form that states who inherits it upon the death of the asset holder.

It’s important when one considers their overall estate planning that they look both at their Will and at these other documents which pass outside their Estate (and thus, the Will does not control their disposition) and ensure that everything works well together.

Finally, a good estate plan will envision, or will include, a battery of documents that appoint someone to assist you in making decisions during your lifetime. For example, if one is concerned with ensuring that a trusted family member or loved one can manage their finances in the event of diminished capacity or incapacity, a Power of Attorney may be a helpful document. Similarly, a Health Care Proxy is a very powerful document, whereby one can name an agent to make medical decisions on their behalf. A Living Will gives that agent instruction concerning artificial or heroic measures to keep one alive if they are comatose.

Finally, it may also be beneficial for someone to sign a funeral directive that states their wishes concerning burial or cremation (if the person hasn’t already made other arrangements, such as cadaver donation), or prepays their funeral

So, as highfalutin’ as having an “estate plan” may sound, it’s something that most everyday New Yorkers have or should have. Of course, there are some people who are fine with the statutory defaults concerning who inherits their assets or makes decisions for them. But for those who are not, signing these documents will ensure that everything goes smoothly, not only during your lifetime but even after it.

For more information on this topic, please contact me.