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Tip Sheet: Getting Started With Estate Planning

Thu, 11/09/2023 - 11:12

Despite the best efforts of the ancient Egyptians, you can’t take it with you. Once those tombs were discovered, and people realized the pharaohs’ riches were left moldering in vast underground vaults, an industry called “estate planning” was born: Best to give your valuable leftovers to those you love, instead of being buried with it all.

Doing so, however, requires lawyers and financial advisers. At its most basic, estate planning doesn’t need to be overcomplicated — but that doesn’t mean it’s easy, because it’s emotional, with death and dying looming over the necessary conversations.

The Essentials

Two experts who spoke with The Star agreed that there are four essential documents that everyone needs: a health care proxy, a living will, a power of attorney, and a last will and testament.

“A lot of people, even if they’re wealthy, do not have an estate plan in place,” said Gina Plansker, an estate attorney at Tarbet and Lester, an East Hampton law firm. “This is the most important. If you don’t have a last will, your assets will pass according to the laws of intestacy.”

“Intestacy” is defined by Webster’s Dictionary as “the fact or state of dying.” In New York, the law says the first $50,000 of the deceased’s estate plus half of whatever remains will go to a spouse, while the other half goes to the children. “Most often, that’s not the intended wish of someone,” Ms. Plansker said. “You have to consider who you want to be in charge, and where your assets will go. You want to appoint an executor to make these decisions, instead of the courts.”

A last will is also where one may appoint guardians to care for under-age children. Ms. Plansker says that often holds people up because they have a hard time choosing a guardian.

In the meantime, Peter Soriento, a managing partner at New York City-based Periscope Wealth Partners in alliance with Equitable Advisors, said another option, at least for bank accounts, is called “transfer on death.” “It’s a much more effective way to transfer wealth than using a last will and it also supersedes the will, and the money can transfer directly to your heirs without going through probate,” he said.

“A last will is really for things that can’t be transferred via beneficiary.”

Health Care Needs

A health care proxy is the person who will make health decisions for you if you’re incapable of making them. It’s important even outside of the estate-planning conversation because you could be humming along, in your 30s, not thinking you’ll ever die when WHAMMO you get into a car accident that leaves you in a coma. Who is going to decide what sort of care you receive?

A power of attorney appoints someone to make financial decisions in a similar scenario. Say you’re incapacitated and you can’t get into your bank account; a power of attorney gives someone else that power, along with other capabilities.

The living will is different from the last will and appoints someone to make your end-of-life decisions. If you don’t want to be kept alive by artificial means, that’s the document where you would specify “do not resuscitate” (DNR), an important detail to attend to while you can.

Get Comfortable

Despite all the vocabulary, Mr. Soriento says estate planning really boils down to communication, and having what could seem like difficult conversations becomes more comfortable and common.

“That’s part of what I do as a financial planner. I encourage a family meeting, at least once a year, and I’ll help coach clients through that. I’ll set up what they should be talking about, short-term goals, and long-term goals. If you do them often enough it becomes a natural conversation,” he said. “You review beneficiaries every three years. People die, people move, you might fall out with them. My role is that of a coach. You’re more likely to stick to a plan if you have a conversation on a regular basis.”

Looking Ahead

A last suggestion offered by Mr. Soriento is to buy a “final expense life insurance policy.” He said they can help because the average funeral can cost $20,000. “The turnaround times on these policies are really fast. They can pay out within a week to 10 days.”

Alternatively, you can plan on living forever.


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