Broker Check
April 2022 Newsletter - Estate Planning 101

April 2022 Newsletter - Estate Planning 101

April 15, 2022
Share |

Dear First Mates,

Happy holidays! I am delighted to have my first guest writer, Amanda Ebbin, for my newsletter. Amanda has been an estate attorney at Wolf Law, P.C. for over 12 years and is the senior associate in the estate planning field. Amanda and I met while studying abroad in Australia at the University of Melbourne. It is amazing to recognize that we have remained friends for over 20 years and that we both work in fields helping clients manage their wealth. Without further ado – here is Amanda, who will break down the documents needed for a sound estate plan:

My name is Amanda Ebbin and I am honored to be the first guest writer for The WealthPlan LLC. Many people avoid thinking about estate planning because they don’t want to think about their mortality, which is understandable. However, taking time to prepare a proper estate plan is an act of love for those they care about. It makes it easier for their family to adjust after you have left them. To prepare, there are a set of core documents one needs in an estate plan, including: (1) a will, (2) a power of attorney, and (3) a health care proxy. Let’s go a bit deeper into each of these.


The Will

What is a Will? A will is a legal document that sets forth how your assets pass upon your death. The will appoints a fiduciary, known as the Executor, whose role is to submit the Will to the Surrogate’s Court and prove that the will is valid. Once the court appoints the named Executor, the Executor has the power to marshal the assets of the estate. 

Marshaling the assets refers to gathering and inventorying all the assets of the decedent, and liquidating personal property, real property, and stocks into one account in the name of the estate. The Executor also must pay estate administration expenses and estate taxes, if any, and distribute the assets in accordance with the terms of the will. It is very important to talk to a professional when establishing an estate plan so that your assets can be transferred to your desired beneficiaries in the most protective manner.

Why create a will? A will is very beneficial in many situations. For example:

  • If you have a child with special needs who is receiving Medicaid benefits, a will can be drafted to leave assets to that child in a supplemental needs trust. This trust will be used for your child’s benefit in a way that will not impair his or her ability to obtain those benefits.
  • If you don’t trust your child’s spouse, a will can be drafted to keep assets within your family bloodline and ensure that upon your child’s death the remaining assets, if any, pass to your grandchildren rather than to your child’s spouse.
  • If you have significant assets, a will can take full advantage of the Federal and state estate tax exemptions and prevent assets from being included in your children’s estates.

Health Care Proxy

In addition to having a will, any good estate plan includes executing advance directives such as a Health Care Proxy and Power of Attorney. Unlike the will, advance directives are documents that are used during one’s lifetime and are no longer effective upon death. The Health Care Proxy provides a trusted family member or friend with the power to make decisions about your medical treatment in the event you become unable to do so. It is important to designate a person you trust with your healthcare treatment as your Health Care Proxy before you even think you need one. These decisions may include the ability to remove or provide life-sustaining treatment. Hospitals, doctors, and other health care providers must follow your agent’s decisions as if they were your own.

Power of Attorney

A Power of Attorney allows you to choose someone you trust to take care of your financial matters on your behalf. Many people may choose a spouse, relative, or close friend to be their Power of Attorney. The agent’s duties could include, for example, allowing your agent to perform banking transactions, real estate transactions, and estate transactions on your behalf. If you would like to give your agent the ability to gift your assets to others in the event Medicaid planning or estate planning is necessary, it is important that the Power of Attorney allow for gifting in excess of the $5,000 limitation currently in effect.

Please note: Your agent under both the Health Care Proxy and the Power of Attorney must act according to your known wishes. If your wishes are not known, your agent must act in your best interests.

One of the first clients I worked with when I started my legal career provides an example of how important it is to have a will. My client was a young woman who unexpectedly lost her husband with whom she had 3 minor children. They were a young couple and never considered the importance of preparing a will. According to state law, the NY "intestacy statute" - or the statute which sets forth how property is distributed when there is no will or testamentary instrument, the assets of the deceased husband were divided as follows: the first $50,000 plus half of the estate passed to the surviving spouse, and the remaining 50% of the estate passed to the minor children. This forced our client, a grieving spouse, to initiate a guardianship proceeding in court to have her appointed as the Guardian of Property of her own children! Once appointed, our client had to account to the court each year to show that she was using the money properly and solely for the benefit of her children.

Please note: If her husband had a will, any court intervention would have been avoided by him leaving his assets to his wife, or in trust to his children, ensuring that his wife had full control over the use of the assets.

In conclusion, whatever your life circumstances are, it is worthwhile to meet with an estate planning attorney to explore your options and gain the peace of mind of knowing that your affairs will be settled in the way that you “Willed” and not as determined by the law and the courts. If you do not have a will, Health Care Proxy, or Power of Attorney in place, I strongly recommend that you begin the process to implement these. If you have a will, Health Care Proxy, and Power of Attorney that were created many years ago, I suggest reviewing the documents, and ensuring they still reflect your current wishes. If you have any questions or would like to discuss any estate planning questions with me, please feel free to contact me at 516-877-9653.

Estate Planning Resources:

-Estate Plan Review

-Estate Plan Update

P.S. Here is my YouTube vid o’ the month!

P.S. Here is my track o’ the month!

P.S. Here is my read o’ the month!

With gratitude,

David Warshaw, CFP®