Basic Estate Planning Versus Complex Estate Planning: Which Is Right for You?

Let’s get the most important thing out first: estate planning is for everyone — “basic estate planning,” that is, provided you’re an adult. A basic estate plan includes four things:

• A Will, to determine who is in charge after your passing and where your assets go.
• A Power of Attorney, to determine who is in charge of your financial and general affairs while alive but unable to act on your own.
• A Health Care Proxy, with or without a living will, to determine who is in charge regarding your health care decisions while alive but unable to act on your own.
• Something I call “Asset Alignment,” which is a granular understanding of how you own your assets, including any beneficiary designations and how they may or may not pass to your heirs according to the terms of your will.

This is an intensely personal process. It need not be overwhelming or take an extraordinary amount of time. An experienced estate planning attorney can accomplish these four things in two meetings of about an hour or so each, including several hours of time in between preparing documents and providing analysis. At its core, basic estate planning is about empowering an agent, typically a trusted family member, to act on your behalf in a crisis without sacrificing your privacy or flexibility.

It is critically important for your own peace of mind to have this plan in place, but furthermore, for your loved ones to have clarity regarding who’s in charge, what decisions need to be made, and who ultimately benefits. A basic estate plan, as outlined above, is sufficient for perhaps most people. If all this is all that is accomplished, then you should be able to sleep well at night.

When Complex Estate Planning Becomes Necessary

But of course, this brings me to “complex estate planning.” Sometimes a basic estate plan is insufficient. Though a critical first step, a basic estate plan alone may leave many concerns unaddressed. Such complex concerns include:

• Addressing exposure of your assets to federal and/or New York State estate taxation.
• Special needs planning, including Supplemental Needs Trusts, which are designed to protect an individual’s eligibility for public benefits (Supplemental Security Income and Medicaid), while still benefiting from an inheritance, though in a more restricted manner.
• Medicaid eligibility, including long-term care financing and related asset protection planning (irrevocable trusts and life estate deeds).
• Blended or unique family trees or relationships.
• Complex or illiquid asset holdings, including real estate in multiple states and family businesses.

Start With the Basics, Build From There

Ultimately, you should not let any of these or additional complex concerns create a barrier to your preparation of a basic estate plan. Instead, it’s better to think of it as a multi-step process. It may be helpful also to understand that an estate plan, in most cases, need only be reviewed every ten or so years. The effort is worth it.

We’re honored to help with your basic or complex estate planning needs.

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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.