Contemplating Your New York Will, Trust and Advance Directives

Whether the centerpiece of your estate plan is a Last Will and Testament or a Trust, the questions below may be helpful in collecting your thoughts to discuss your wishes at an estate planning consultation. You may use this guide in any manner that you wish - whether you use it as a workbook, a catalyst to begin thinking about your estate plan or not at all, the topics are relevant upon consultation to design your documents.

You will notice our label “Mandatory” throughout. This means that a decision regarding the subject is relevant and incorporated in most estate plans.

PERSONAL INFORMATION: Mandatory

Provide your full name, marital status, spouse/partner and children’s full names and addresses (including of course, adopted children, if any), as applicable. Include deceased and estranged children if applicable.

Is any family member named above disabled or receiving government benefits, such as Medicaid or Social Security Income or Social Security Disability? If so, state their name, benefits that they are receiving, and disability below:

YOUR TANGIBLE PERSONAL PROPERTY: Mandatory

Tangible personal property refers to your physical “things”, such as furniture, household items, automobiles, jewelry, etc. You can list special belongings (that you described in sufficient detail to clearly identify them) and the person(s) to receive them. Then state those people or charities that will receive the balance of your tangible personal property – either equally or otherwise;

If you would like to list gifts of tangible personal property in your Last Will and Testament and/or Trust (to make the bequest legally binding), describe those special items and the beneficiaries below (this is optional):

For example: My Diamond Tennis Bracelet

To My daughter, Minnie Mouse

Description of Tangible Personal Property

Personal Property Distributions

My ________________________________________

To __________________________________

My ________________________________________

To __________________________________

My ________________________________________

To __________________________________

SPECIFIC SUMS OF MONEY: Optional

You may name certain individuals or charities who are to receive a stated dollar amount. This is optional.

For example:

The sum of Five Thousand Dollars ($5,000) to each of my grandchildren, or to my sister, ____________________

If you wish to give to individuals or organizations a specified sum of money, provide this information below:

The sum of ______________ to my _______, __________

The sum of ______________ to my _______, __________

The sum of ______________ to my _______, __________

The sum of ______________ to my _______, __________

YOUR REAL ESTATE: Optional

The Residuary Clause will include and dispose of your real estate (generally, the net sale proceeds) if you do not mention it in a separate provision.

If you own your home and have special instructions regarding it or other real estate, state your wishes here. This is optional:

RESIDUARY CLAUSE: Mandatory

The balance of your Estate is commonly known as your "Residuary Estate”. It is whatever is left of your estate and the last distribution to be made by your Executor/Trustee after satisfying all taxes, legitimate debts and expenses of your estate and gifts you may have stated above (of tangible personal property, real estate, specific sums of money). It includes bank accounts, brokerage accounts[1], net proceeds of real estate sales, etc.

The Residuary Clause disposes of everything else that you own that you have not specifically directed in your Will and/or Trust. It is “All of the Rest, Residue, and Remainder” of what you own.

Please realize that if you have an account with a surviving joint owner or filed a beneficiary form with a financial institution your Will may not be necessary to transfer those assets upon your demise. Please do discuss this further with your attorney.

This clause is Mandatory.

For example:

“I give all the rest, residue and remainder of my estate to my “spouse" or “equally to my children" or to whomever.

Alternatively, you could have your Executor/Trustee divide your Residuary Estate into parts or percentages to be distributed as directed in your Will.

For example:

My Executor/Trustee shall divide my residuary estate into 10 (or 100) equal shares

(or as many shares as you wish) to be distributed as follows:

Name

Relationship

Shares

Provide the beneficiaries of your Residuary Estate (full names, relation to you, and addresses if not provided previously). State the number of shares you wish your estate to be divided into and the amount each beneficiary is to receive, should you have more than one.

My Executor/Trustee shall divide my residuary estate into ____ equal shares to be distributed as follows Unless it all goes to one person or charity; this section is Mandatory.

Name

Relationship

Share

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

Now assume each beneficiary predeceases you – you must state who shall receive the share you would have left to them. Frequently, (but not necessary- this is totally your choice) it is left to the predeceased beneficiary’s descendants, down the blood line[2] (denoted by the term “per stirpes”), If the deceased beneficiary has no children and no grandchildren, you may state that their share shall be distributed pro rata, to the other beneficiaries named who survive you. If you prefer, you may name a new person or class of people or a charity as an alternative to the gift going down the blood line.

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

You need not direct that your estate be immediately distributed upon your demise. Assets may be held in Trust for some of all of your beneficiaries, to be distributed over time, or upon a specific occurrence, such as attainment of a particular age, or an annual distribution of a part of their inheritance.

TESTAMENTARY TRUSTS

These are Trusts incorporated into your Last Will and Testament – to be funded upon your demise, instead of gifting the assets directly to the beneficiary. This is optional unless you know a beneficiary is receiving or may qualify for Government Benefits due to a health condition, then a Supplemental Needs Trust may be an important instrument to protect the beneficiary’s ability to continue to receive Government Benefits (see below*).

A Trust is a legal entity established to hold, manage and invest property, such as real estate or investments, for the benefit of one or more persons (the “beneficiary”). The person who takes legal control of the property is called the “Trustee”. The Trustee holds legal title or interest to the property, subject to the Trust provisions, and is responsible for managing, investing, and distributing the assets in the Trust as the Trust provisions direct. The beneficiary holds an equitable or beneficial interest.

A Trust may be established within your Last Will and Testament; the Trust does not commence until after your death. Such a Trust is known as a “Testamentary Trust”. A “Testamentary Trust” lies dormant, until and unless the Will is probated upon the death of the Testator’s (creator of the Will).

Specific Testamentary Trusts can be useful in accomplishing estate planning goals. For instance, the Testamentary Trust can be used to provide tax savings, asset protection, and Medicaid eligibility for the beneficiary.

Trust for Tax Savings

If you have a sizable estate, such that you could incur NYS or Federal Estate Tax upon your demise, it is generally advisable to incorporate a tax planning Trust in your Will and/or Trust.

If your estate plan includes all or a portion of your assets going to your spouse upon your demise, you may be able to reduce or eliminate estate taxes by including a “Credit Shelter Trust” for your spouse. 

You may leave any amount to your spouse tax free – this is known as the “marital exemption”.  The government allows this because it is assumed that they will have a chance to tax your estate when your spouse dies.  Thus, funds transferred to your spouse are exempt from the estate tax upon the first spouse to die.  However, if you leave assets to your spouse outright and he or she will have a taxable estate, you may be missing an opportunity to protect at least part of your estate from being taxed.  This is a very important topic if you have a taxable estate.  Discuss this at your consultation- as it is a critical part of your estate plan.  

Protecting Disabled Beneficiaries with Supplemental Needs Trusts

A Supplemental Needs Trust can be created during one’s lifetime or as part of one’s Will and/or Trust. Its purpose is to provide for the continuing care of a disabled beneficiary (spouse, child, relative, or friend). The Trustee will be permitted to provide for the needs of the disabled beneficiary with Trust funds if the beneficiary does not qualify for or is not receiving benefits through public programs. Therefore, the beneficiary will not lose eligibility for benefits such as Supplemental Security Income and Medicaid among others.

YOUNG BENEFICIARIES: Mandatory

You may choose at what age (for example, age 21, 25, 30, or 35 or older) your beneficiaries and contingent beneficiaries are to receive their share of your estate outright. Their share can be distributed to them solely in the discretion of the Trustee or as you direct, such as for specific occurrence, need or milestone or simply a certain percent annually or bi-annually for example. While their share is held, your Trustee, named in your Will and/or Trust, is charged with the responsibility of adhering to the directions you have stated regarding distributions from the Trust.

You must decide whether a beneficiary’s share shall remain in Trust throughout the beneficiary’s lifetime or at what age the Trust property shall be distributed and how that distribution shall be made.

Some examples (not to be used or copied into a do-it-yourself document, as these are not complete provisions, they are intended merely to convey ideas):

If any share of my estate shall become payable to a beneficiary who is less than 35 years of age (or whatever age you choose), then my Trustee shall hold said share IN TRUST, for the benefit of said beneficiary to manage and distribute as follows:

One-half of the principal so held shall be distributed to said beneficiary at age 30 and the balance of the Trust share yet remaining shall be distributed to said beneficiary at age 35. Meanwhile, my Trustee may pay as much of the net income and/or principal of said Trust share as the Trustee shall deem necessary or proper in the Trustee’s sole discretion to or for the benefit of the beneficiary (and if you wish, to his or her legal dependents}.

OR

If any such share of my residuary estate shall become payable to a beneficiary who is less than 35 years of age, then my Trustee shall maintain and distribute said share in Trust share as follows:

  1. One-third (1/3) of the principal so held shall be distributed to said beneficiary at age Twenty-Five (25). One-half (½) of the balance remaining shall be distributed to said beneficiary at age Thirty (30), and the balance of the Trust fundshare yet remaining shall be distributed outright to said beneficiary at age Thirty-Five (35);
  1. In the meantime, the Trustee may pay as much of the net income and/or principal of said fund as the Trustee shall deem necessary or proper in the Trustee’s sole discretion to or for the benefit of said beneficiary;
  1. If such beneficiary shall not have attained age Thirty-Five (35), but has otherwise attained an age at which a partial distribution is to be made hereunder, then the Trustee shall make a distribution to that beneficiary of that portion of the beneficiary’s share applicable to said beneficiary’s age;
  1. In the event said beneficiary dies before attaining age Thirty-Five (35), then the balance of said share shall be distributed to said beneficiary’s estate.

How would you like the principal distributed to young beneficiaries? Even if you do not name a young person as a direct beneficiary, it is conceivable that this may occur as a contingency. Mandatory

Should it remain in Trust for a particular beneficiary or all of the beneficiaries’ lifetimes?

If not, at what age would you like beneficiaries to receive the balance of the principal? Age 25 to 35 years is common, but this is your decision.

How should it be distributed? In Stages? If so, what are the rules?

Lump Sum? At what age shall the balance be fully distributed?

YOUR EXECUTORS (Last Will and Testament): Mandatory

After your death, your Executor will be responsible for marshaling your assets, paying your just debts and taxes, and carrying out the provisions of your Will. (If you incorporate a Trust in your Will, the Trustee is responsible for Trust Property and distribution to the beneficiaries of the Trust).

Whom do you wish to appoint as the Executor of your estate and what is their relationship to you?

Provide the following: Mandatory

Exact name as they wish it to appear, and address

Relationship:

Primary Executor(s), or you can name two as Co-Executors:

Alternate Executor or Co-Executors:

YOUR TRUSTEES: Mandatory

If a Trust is incorporated in your estate plan, do you wish to appoint the same parties that you mentioned as your Executors above? If not, provide:

Exact name as they wish it to appear, and address

Relationship:

Initial Trustee. You can name more than one person or an institution

Successor Trustee:

GUARDIANS FOR YOUR MINOR CHILDREN: Optional

Initial Guardian:

Relationship:

Social Security Number:

□_______________________________________

□_______________________________________

□_____________

□______________

□_____________

□_____________

Successor Guardian:

Relationship:

Social Security Number:

□_______________________________________

□_______________________________________

□_______________

□_______________

□_____________

□_____________

ADVANCE DIRECTIVES

LIVING WILL:

The Living Will contains instructions regarding life support and end of life-decision making. It is a written statement of your wishes regarding medical treatment during a critical life threatening condition. It expresses your own choices and desires concerning life sustaining intervention should you be incapable of expressing these wishes and there is no hope of a meaningful recovery.

HEALTH CARE PROXY:

A Health Care Proxy allows you, as principal, to appoint agents, in order of priority, to make health care decisions on your behalf should you become unable to make these decisions yourself. By appointing individuals to make the health care decisions on your behalf if you cannot, you will ensure that your health care providers follow your wishes regardless of your condition.

The health care agent should be someone you trust, is capable of handling complex situations, and can act rationally and quickly under pressure. Your proxy must honor your wishes, regardless of their own. Making health care decisions on behalf of someone else can be a very daunting task. Therefore, it is important to select an agent who can advocate for you and in your best interest- when and if the time comes to make important medical decisions. You may appoint successive agents, but they are listed one at a time in your order of priority. Medical professionals cannot and will not wait for a consensus among multiple proxies in an emergency.

YOUR HEALTH CARE PROXIES:

Name:

Relationship:

Address:

Phone Numbers:

1. ___________________

________________________

________________________

_______________

_______________

2. ___________________

________________________

________________________

_______________

_______________

3. ___________________

________________________

________________________

_______________

_______________

4. ___________________

________________________

________________________

_______________

_______________

POWER OF ATTORNEY:

A Power of Attorney is a legal instrument in which you, as the principal, appoint an agent to act on your behalf with respect to financial matters. A Power of Attorney empowers your agent to access, control, and manage the principal’s assets - but only to the extent that the principal permits as specified in the Power of Attorney. The agent under a Power of Attorney may transfer or gift no more than $500.00 in the aggregate annually. It is not much of an estate planning tool without the Gifts Rider. If the Gifts Rider is executed at the same time the Power of Attorney is, then the Gifts Rider will be incorporated into and be made part of the Power of Attorney. You can, with the Gifts Rider, permit the agent to transfer assets either in excess of or less than the $500.00 limit that the Power of Attorney alone permits. When engaging in Tax or Medicaid planning, the Gifts Rider can be an important component of an Estate Plan.

An “Immediate Power of Attorney" empowers the agent as of the time of the principal executes the Power of Attorney. A “Springing Power of Attorney” empowers the agent upon the incapacity of the principal.

A “Springing Power of Attorney” is a Power of Attorney that will not immediately empower the agent to act on the principal’s behalf. Instead, it becomes effective when and if the principal becomes incapacitated. What constitutes incapacity? The principal defines incapacity in the Power of Attorney itself. A Springing Power of Attorney would look something like the following:

Springing Power Provision: This Power of Attorney is not effective until and unless I become unable to handle my own financial and legal matters. An affidavit from my attending physician (or you can require a specialist, such as a neurologist, or more than one physician, or a physician opinion and a loved one’s) stating that in his/her opinion, I no longer have the ability to handle my own financial and legal matters shall satisfy this condition. If I regain capacity to handle my own financial and legal matters, as declared by my attending physician by affidavit, this Power of Attorney is no longer effective

New York does not permit the Power of Attorney to include the authority to make medical decisions – that authority is granted in the Health Care Proxy.

The principal may appoint one agent or multiple agents, to act alone or separately. An agent is a “fiduciary” – one who is obligated to act loyally, with the utmost discretion and in the principal’s best interest at all times. Which would you choose?

  1. STANDARD or SPRINGING Power of Attorney? (circle the one requested)
  1. If SPRINGING – who will decide? If physician, now many?
  1. Include Statutory Gifts Rider? □ Yes □ No

AGENTS UNDER A POWER OF ATTORNEY:

Initial Agent; you can name two or more as Co-Agents:

* Exact name as on license and the name they wish to

appear, and address if not on questionnaire

Relationship:

□____________________________________________

□____________________________________________

□______________________

□______________________

Successor Agent(s):

* Exact name as on license and the name they wish to

appear, and address if not on questionnaire

Relationship:

□_____________________________________________

□_____________________________________________

□______________________

□______________________

It is our hope at Corliss Law Group that this “workbook” has helped clarify some of the estate planning choices you will make in discussing your estate plan.

 

[1] Please be aware that your Last Will and Testament and/or Trust will only govern those assets in your name alone and have no transfer on death designation (such as designated beneficiaries or “in Trust for” accounts).

[2] “Per Stirpes” means that a pre-deceased beneficiary’s share will be equally divided among his or her children or will go down to the next generation, i.e. grandchildren, if a child of the testator has predeceased, until a surviving beneficiary is found.

Categories