Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

Are You Ready for the Elder Years?

By: Anthony J. Enea

As attorneys we are all too often preoccupied by the lives and problems of others. On a daily basis we go from one client to another, utilizing all of our strength, energy and intellectual resources with the hope of providing our clients with the best legal services possible. Their problems and concerns are inevitably always on our mind. Unfortunately, our profession leaves us little time to focus on our own personal affairs, especially those related to our aging. The demographic studies done of the membership of the New York State Bar Association (NYSBA), reflect that our membership is rapidly aging. The largest demographic group of attorneys are those over the age of 55 years. Believe it or not, if you are 55 or older you qualify to be a member of NYSBA’s Senior Lawyers Section.

It is my hope that this article will encourage you to take a step back and assess whether you have taken some of the most basic steps in organizing yourself for the elder years. The following are my suggestions for your consideration.

A. Physically organize your affairs. Locate and organize into separate folders/binders all of the most important legal documents you have executed, such as your original Last Will and Testament, Trust(s), Advanced Directives (Powers of Attorney, Health Care Proxies, etc.), Deeds to your properties, mortgages and notes, insurance policies (life, health, disability, home, long term care, malpractice), bank and investment records, income tax returns, passports, birth certificates and military discharge records, etc.

Organizing these documents will surely be a time consuming process, however, it will be a process that allows you to revisit many matters you may have not paid attention to for a number of years.

Once you have physically organized these documents, I would suggest that you let your spouse and/or loved ones know where they are located. I would also suggest that you not place your Last Will and Advanced Directives in a Safe Deposit Box unless someone other than yourself has a key and is authorized signatory on the box;

B. Review and update your existing Last Wills, Trusts and Advance Directives to ensure they are up to date and reflect your present financial circumstances and wishes. The Last Will you prepared when you were newly married with minor children may not be reflective of your current state of affairs and/or wishes. For example, your existing Last Will and the titling of your assets may not allow for appropriate estate tax planning on your death or the death of your spouse. Additionally, the individuals you selected as the Executors and/or Trustees 25 to 30 years ago may not be the same individuals you wish to act in that capacity now.

An extremely important document to have as one ages which is often not properly drafted is the Durable Power of Attorney (POA). It is most important that the Power of Attorney be Durable (survive your subsequent incapacity) and be sufficiently broad enough to allow the agent to take all steps necessary to protect and preserve your assets in the event of your incapacity. The Power of Attorney you signed appointing your spouse to act as your agent at a house closing may not be the one you need and want if you suffer a debilitating illness. You should in my opinion have a Durable Power of Attorney with as many powers (including broad gifting powers) as humanly possible. Many Guardianship proceedings would be avoided in their entirety if a sufficiently broad POA was in existence;

C. Organize and review all existing Insurance Policies. We often know that we have purchased Life, Disability and Long Term Care insurance, but, it may be years since we assessed the adequacy of the coverage and the policies. For example, do you have life insurance that is term, universal and/or whole life. Is the death benefit sufficient to meet the current needs of your family and/or loved ones in the event of your demise. From an estate tax and planning perspective, it may be wise to have the policy owned by a irrevocable life insurance trust, so that it is not part of your taxable estate. You also may not want your 21 year old child receiving a million dollars outright upon your death. Generally, most insurance professionals are willing to provide a no cost review of one’s existing policies. Additionally, because of the existing low interest rate environment, the policy may not be meeting its projected rate of return, which may significantly impact the cash value projections made when you purchased the policy;

D. Organize and list the names, addresses and telephone numbers of all the professionals you are currently utilizing for your family and/or loved ones. Upon your incapacity or demise the last thing you want your family having to deal with is trying to track down your attorney, CPA and/or insurance professionals. Additionally, you should advise your family and/or loved ones as to the professionals you would recommend they contact upon your incapacity or demise. You obviously do not want someone you despise handling your estate;

E. Organize the names, addresses and telephone numbers of your physicians, therapists, pharmacies and other health care providers. At a time of crisis having this information in one spot will be invaluable;

F. Inventory, organize and keep at least 8 years of your financial and bank records. Many families are unsure and unable to locate all of the bank and financial accounts their loved ones have at a time of illness or death. Additionally, if you need to apply for Medicaid to cover your possible stay in a nursing home (which would cost you approximately $15,000 per month if you are not eligible for Medicaid and don’t have Long Term Care insurance) you will need the last 5 years of all bank and investment account statements and records;

G. Review what steps if any you have taken to protect your life savings in the event you and/or your spouse/significant other need long term care in the future. Clearly, no one plans to have a stroke or heart attack and/or develop parkinson’s, alzheimer or dementia. It’s not part of the commercial with you and your loved one walking down the beach hand in hand enjoying the glorious days of your retirement. Unfortunately, things don’t always go as planned. I am often reminded by one of my Associates of the Jewish saying that “Man plans, God laughs.”

Planning for the potential need of Long Term Care is an endeavor that requires foresight and recognition of the fact that it is possible that you may suffer a debilitating and chronic illness. The purchase of long term care insurance should be strongly considered. There are many new products that are available that are a hybrid of life insurance and long term care insurance. Additionally, utilization of a Medicaid Asset Protection Trust should be high on the list of available planning options especially as you get closer to the age of 65;

H. Review and assess your retirement goals and plans. Retiring from the practice of law as a single practitioner or as a member of a small firm requires an organized plan and strategy. While many of us want to go out with our boots on, doing so without having a plan in place for the transition of your practice and files to other attorneys will create significant havoc for your clients, your estate and family.

I. Review and assess any pension, social security and annuity benefits you are entitled to. Review potential IRA and/or qualified annuities and their minimum required distributions;

J. Review and organize your burial arrangements. The purchase in advance of a burial plot(s), mausoleum, crypt, etc., while it may sound morbid, will generally alleviate a great deal of stress from your family and loved ones upon your demise.

I regularly find myself extolling the virtues of organization and planning to my associates and staff. As we approach the “elder years” it’s important that we apply those organizational virtues to our own personal and professional lives. As Winston Churchill once said “Let our advance worrying become advance thinking and planning.”

*Anthony J. Enea, Esq. is the Managing Member of Enea, Scanlan & Sirignano, LLP with offices in White Plains and Somers N.Y. He can be reached at 914-269-2367 or at [email protected]. He is the Immediate Past Chair of the Elder Law Section of the New York State Bar Association and is the recipient of the “Above the Bar Award” as the leading elder care attorney in Westchester County. He is AV Rated Preeminent and has been designated as a “Super Lawyer” and “Best Lawyer.” He is also fluent in Italian.

Enea, Scanlan & Sirignano, LLP