Estate Planning FAQ

General Questions

Trusts

Wills

 

Living Wills

Powers of Attorney

Health Care Proxy


General Questions


Q: What Is an Estate?

An estate consists of all the property a person owns or controls, whether in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust, and all other moneys that would be generated on the person's death, such as through life insurance. It includes, but is not limited to:

  • real property and things attached to it;
  • all personal property, including automobiles, bank accounts, stocks and bonds, cash, furniture, jewelry, art, collectibles and retirement plan benefits;
  • all businesses, such as sole proprietorships, partnerships, corporations and joint ventures; and business interests, such as the goodwill, inventory, tools and equipment, accounts receivable and other business property;
  • life insurance, pension benefits, IRAs, 401Ks; and all debts and obligations owed to you by others.

Thus, the size and complexity of an estate will vary based upon individual circumstances.
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Q: What Is Estate Planning?

Most people are familiar with wills. Many of them have read about trusts as an alternative means of distributing assets after death. They may also have an elementary understanding of estate taxes and how to minimize them.
Yet, "estate planning" entails more than providing for the disposition of your assets upon your death and more than minimizing the amount of tax levied upon your estate. Comprehensive estate planning will, of course, provide for that. In addition, estate planning will provide for the administration and protection of assets during a lifetime and for decision making in the event of a disabling illness.
In other words, estate planning today goes beyond its traditional role of planning for the security of your dependents and making distributions to them. Today's estate plans could more accurately be called "lifetime plans" because they often focus on your needs throughout your lifetime.
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Q: What Should I Consider as Part of My Estate Plan?

Any complete estate plan will contain:

  • a Last Will and Testament;
  • a durable general power of attorney naming an agent (and an alternate) responsible for asset management, bill paying and other financial activities if one is unable to do such things for oneself; and
  • a health care proxy naming an agent (and an alternate) responsible for medical decision-making.

It may also contain:

  • a living will or other written advance directive giving instructions concerning the type of care one wishes to receive (or avoid) in the event of a terminal illness;
  • a revocable or irrevocable living trust;
  • funeral arrangements;
  • a plan for lifetime gifting; and, the purchase of long-term care insurance or some other plan for paying for long-term care in the event of a catastrophic illness.

There are other estate planning techniques and tools that should be considered. Contact us today for an estate planning consultation.
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Q: Do I Need an Attorney?

There are many self-help guides to drafting wills and trusts and to avoiding estate taxes. There are also numerous do-it-yourself kits and pre-printed forms. The problem with such guides, kits and forms is that they quickly become outdated. For that reason, they should be avoided. If you are interested in doing your own estate plan, you should be prepared to invest a considerable amount of time making sure you have the most current information to work with.

Brian Bronsther of the Bronsther Law Firm, P.C., is an attorney concentrating on estate planning and elder law, and is trained and experienced with wills, trusts, powers of attorney, living wills and the intricacies of estate taxes. While he may recommend accounting services, financial planners or insurance purchases, he does not earn fees by selling such products. As a result, you will get thorough and unbiased advice from him and his staff.
Contact us today for your estate planning consultation.
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Trusts


Q: What Is a Trust?

A trust is a legal relationship in which one person (a "trustee") holds property for the benefit of another (the "beneficiary"). The person placing property in the trust is known as the "grantor." With most lifetime trusts, the grantors are also the trustees during their lifetimes, as long as they remain competent. Grantors name successor trustees to take over if they become incompetent or die, and to distribute the property after they die.
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Q: Are There Different Types of Trusts?

Trusts can be created for varying purposes and so you may read about income only trusts, supplemental needs trusts, bypass trusts and even pet trusts, among others. All of these trusts, however, are variations of the lifetime trust. The variety of purposes of for which a trust can be utilized underscores the value of trusts as an estate and lifetime planning tool.
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Q: Why Is It Called a Lifetime Trust?

A trust can be created under the terms of will. Such a trust is known as a testamentary trust. Under New York law, a lifetime trust -- also referred to as a living trust or inter vivos trust -- is one created other than by will. A lifetime trust must be in writing and executed in accordance with certain provisions of New York's Estate, Powers and Trust Law. A lifetime trust becomes effective when established and thus can be used during the individual's lifetime. Lifetime trusts may be either revocable or irrevocable.
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Q: What Is a Revocable Trust?

A revocable trust is one that may be amended or terminated during the creator's lifetime.
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Q: What Is an Irrevocable Trust?

An irrevocable trust is one that generally may not be amended or terminated during the creator's lifetime.
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Q: Which Type of Lifetime Trust -- Revocable or Irrevocable -- Should I Have?

Revocable and irrevocable trusts serve different purposes. The question of which type of trust you establish, or even whether to establish a trust at all, is one that is best answered in consultation with an estate planning attorney. Trusts are like any other part of your estate plan; they should be customized to your individual situation and meet your individual needs. Other professionals, such as financial planners, may be able to furnish you with valuable information. Nonetheless, an attorney with whom you have met to discuss your goals and the specifics of your situation should do the drafting of the trust.
Contact us today for your estate planning consultation.
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Q: Is It True that with a Trust I Can Avoid Probate And Save Money?

Probate avoidance is one of the reasons people consider establishing a trust. Upon your death, the assets subject to the trust are distributed in accordance with the terms of the trust. However, property that is not owned by or titled in the name of the trust, or otherwise identified as being subject to the trust, will be subject to probate. One way to address this problem is to have what is known as a pourover will. This type of Will simply states that whatever property no already in the lifetime trust should be transferred to the trust. While a lifetime trust can help you avoid probate and the cost associated with probate, it will not necessarily save more money for you overall unless you incorporate some tax savings plans. More often than not, the cost of a revocable trust will be less than the cost associated with probate.
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Q: What Does It Cost to Set Up a Lifetime Trust?

The cost of setting up a trust will vary according to a variety of factors, not the least of which are the needs of your individual estate plan. In addition to the cost of drafting the trust itself, the cost of titling assets subject to the trust must be considered. After the initial consultation with Brian Bronsther, you may obtain a cost estimate so that you can balance the cost of the trust versus the benefit derived. In this regard it is important that a lifetime trust is coordinated with a will, a durable power of attorney and various other documents which all work together to accomplish your goals.
Contact us today to set up your estate planning consultation.
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Wills


Q: What Is a Will?

A will is a legal document meeting certain legal formalities. In New York, the person creating the will (known as the testator) must be eighteen years of age or older and must be of sound mind and memory. The testator must sign the will in the presence of two adult witnesses who know that the document being signed is intended as a will. These witnesses should not have an interest in the estate of the testator.

New York law does not provide for a particular form to be used in the writing of a will. In addition to being properly executed, a last will and testament will state how you want your property distributed upon your death and provide for the administration of your estate. An estate is administered by the appointment of an executor.

The average will often directs payment of funeral and administrative expenses, payment of the testator's debts and the manner and allocation of estate taxes, if such are due. Depending on individual circumstances, a testator may also want to provide for disabled children, make charitable gifts or set up trusts.
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Q: Do All Assets Pass Through a Will?

Not all assets will pass to another through a will. Jointly owned assets, assets held in trust for another or payable upon death to another will pass to the named individual. Since the terms of your will does not direct their distribution, such assets are considered to pass outside your will.

It is good idea to have a will even if you have jointly owned assets or other assets that will pass outside your will. Chances are, you will still have assets that you have forgotten to put in joint names or for which you have made other provisions. If you have no will, those assets will pass by the laws of intestacy. As already noted, this distribution may or may not be what you would desire.
Contact us today for your estate planning consultation.
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Q: If I Give My Child a Durable Power of Attorney, Do I Still Need a Will?

Yes. A durable power of attorney is deemed terminated upon your death.
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Q: Where Should I Keep My Will?

A will is, of course, an important legal document and as such, it should be kept in a safe place with other important papers. You can file it with the Surrogate's Court in your county or keep it in your attorney's vault. Wherever you keep it, you should make sure that someone - the person you name as executor, for example - knows how to locate it.
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Q: Where Should I NOT Keep My Will?

You should not keep your will in a bank safe deposit box. Due to rules of the New York State Department of Tax and Finance, there will be delays in opening the box.
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Q: How Can I Change My Present Will?

You can change your present will by either executing a codicil to it or by executing a new will. A codicil has traditionally been used when you want to alter, modify or expand the existing provisions of a will in some way. A codicil must be executed with the same formalities as a will. If many years have passed since the execution of your original will, you may want to consider having a new will drafted.

You cannot change your will by crossing out existing provisions, writing new ones in the margin, initialing the changes and then dating them.

Brian Bronsther of the Bronsther Law Firm, P.C., can help you properly change your will. Contact us today for your estate planning consultation.
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Q: What If I Want to Revoke My Will?

Physically destroying the original is one way in which a will may be revoked. A better way, however, would be to draft a new will which expressly revokes the old one.
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Q: Will Other States Honor a Will Drafted in New York?

Generally speaking, a will that is validly executed in the state in which it was drafted will be considered valid by other states.
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Q: Who May I Name as a Beneficiary in My Will?

There is virtually no limit on naming a beneficiary in your will. As a practical matter, New York law contains provisions to ensure that a decedent's spouse and children are provided for in an adequate manner. Nonetheless, assuming your estate is adequate to do so, you may provide for the needs of your spouse, children, grandchildren, siblings, friends and even charities.
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Q: If I Want to Leave Everything to My Spouse, Do I Really Need a Will?

Yes. Many people believe that if they are married, everything will pass automatically to the surviving spouse when one dies. This is not always true. If you have children, under the laws of intestacy, your spouse will receive $50,000 plus one half of the remainder of your estate. Your children will receive the other half of the remainder. Even if you do not have children or grandchildren, believing that everything the two of you own will pass automatically to the surviving spouse when one of you dies is a risky proposition. For example, if you and your spouse opened a brokerage account as joint tenants several years ago, but the brokerage firm mistakenly listed you as tenants-in-common; your interest in the property would not automatically pass to your spouse.

Instead, it could become the subject of lengthy probate proceedings, and your creditors could ask that the property be liquidated to pay any debts that you left behind.

Avoid this mess! Contact us today for your estate planning consultation.
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Q: Is It Okay to Leave a Portion of My Estate to My Children in Equal Shares?

Yes. Many parents think about leaving property to their children in equal shares. Barring special circumstances, there is no reason this desire cannot be accommodated. Yet some thought must be given to how you want your property distributed in the event that one or more of your children predecease you. In addition, one must give careful consideration to whether your children are mature enough to inherit your assets.

Generally, when an estate is to be divided equally among several children, the distribution can be made in one of three ways:

  • 1. Per stirpes;
  • 2. Per capita; or
  • 3. By representation

Contact us today to schedule an estate planning consultation.
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Q: What Is Distribution 'Per Stirpes' Mean?

"Per stirpes" means "by the root" or "by right of deceased ancestor." This distribution is used when you want a deceased beneficiary's share to go to the children of that beneficiary. Consider the following: Mrs. Smith has four children - Alex, Dave, Cindy and Susan. Alex has two sons, Clark and Robert. Susan has a daughter, Jackie. Mrs. Smith leaves a bequest to them per stirpes.

  • 1. If Alex, Dave, Cindy and Susan all survive her, they will each receive 25% of the bequest.
  • 2. If only Alex, Dave and Cindy survive and Susan predeceases Mrs. Smith, the three surviving sons each receive 25% and Jackie will take her father's 25% share.
  • 3. If only Dave and Cindy survive Mrs. Smith, they each will receive 25%, Jackie will take her father's 25% share and Clark and Robert will split Alex's 25% share, taking 12½% each.

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Q: How Would the Distribution Change If a Bequest Were Made "Per Capita"?

"Per capita" means "per head." Assuming the same facts as above, consider the following:

  • 1. If Alex, Dave, Cindy and Susan all survive their mother, they will each receive 25% of the bequest, the same as with a per stirpes distribution.
  • 2. If only Alex, Dave and Cindy survive and Susan predeceases Mrs. Smith, the three surviving children each receive 25% and Jackie will take her father's 25% share because there are still four beneficiaries, i.e., four heads.
  • 3. If only Dave and Cindy survive Mrs. Smith, the distribution now changes. There are now five beneficiaries - Dave, Cindy, Jackie, Clark and Robert. Each would get a 20% share of the bequest using a per capita distribution.

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Q: How Would the Distribution Change If a Bequest Were Made by Representation?

A bequest to be distributed "by representation" means those members of the same generation share equally in any bequest they are entitled to. Once again assuming the same facts as above:

  • 1. If Alex, Dave, Cindy and Susan all survive their mother, they will each receive 25% of the bequest, just as with a per stirpes or a per capita distribution.
  • 2. If only Alex, Dave and Cindy survive and Susan predeceases Mrs. Smith, the three surviving children each receive 25%. Jackie will take a 25% share because she is the only one of her generation receiving a distribution. Again, this is the same as a per stirpes or a per capita distribution
  • 3. If only Dave and Cindy survive Mrs. Smith, the distribution now changes. Dave and Cindy would still receive 25% each, just as with a per stirpes distribution. But now, with a by representation distribution, the 50% that would have gone equally to Alex and Susan will now be distributed equally among Jackie, Clark and Robert. The three grandchildren of Mrs. Smith will each receive 16.6% of the bequest.

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Q: Can I Disinherit a Child?

Yes. Sometimes a parent will decide not to leave anything to a particular child. This is not necessarily a punishment. If one child is doing well and may not need a bequest, or another child is in greater need, a parent may choose not to leave a bequest to a particular child. There may be other reasons why you do not want to leave anything to a child. Again, however, if you die without a will or trust, the laws of intestacy will apply and your children will share equally in your estate.
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Q: Is It Okay to Leave Everything to My Spouse And Then If My Spouse Dies First, Have Everything Go to My Children?

At first glance, this sounds like a practical approach. Unfortunately, this "simple will" approach may result in problems later on if the goal is for your children ultimately to receive the assets you and your spouse spent a lifetime accumulating. For example, Joe and Luanne have two children. Luanne passes away and leaves everything to Joe. After a time, Joe remarries to Amy, who has two children of her own. Joe then passes away, leaving everything to Amy. All of Luanne's assets now belong to Amy and the children of Joe and Luanne get nothing.

Avoid this common problem, and get your estate planning in order. Contact us today for your estate planning consultation.
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Q: If I Own My Home Jointly with My Spouse, Can I Leave It to My Children in My Will?

No. If you pass away before your spouse does, jointly owned property would not be subject to the terms of your will. Your spouse will become the sole owner of the home.
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Q: Should I Include My Burial Wishes in My Will?

No. Typically, family members would make funeral arrangements immediately after your death, prior to the reading of the will. For that reason, including funeral arrangements as part of your will would not be practical. Many people, however, do have specific preferences in mind when it comes to their final arrangements. Sometimes it is a wish to be buried next to a previous spouse, to be cremated or to be interred in a particular cemetery. If that is the case, you should communicate your wishes directly to your spouse and next of kin, even if you decide to make your own arrangements in advance.
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Q: Can I Make an Organ Donation Gift in My Will?

It is not recommended. Again, your will may not be read until after your funeral. For purposes of transplant, the effectiveness of an organ donation requires immediate action. Those who want to be donors should carry organ donor cards, sign the donor space on the back of their licenses, be listed in the New York State Organ and Tissue Donor Registry maintained by the New York State Department of Health and inform family members. For more information on organ donation, especially the NYS Organ and Tissue Donor Registry call 1-518-952-9044.
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Q: Are There Any Issues I Should Be Concerned About with Leaving Property to Minors?

Yes. Certain considerations must be given to the maturity level of the child. In addition, certain securities and other property may be distributed to a custodian under the Uniform Transfers to Minors Act (NYS Estates, Powers and Trusts Law §§ 7-6.1et seq. To try to simplify distribution to a minor and the administration of the minor's property, you should discuss with your attorney how to establish a trust for your child.
Contact us today for your estate planning consultation.
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Q: What Is a Testamentary Trust?

A testamentary trust is a trust established according to the terms of a will. Therefore, a testamentary trust does not take effect until the person who made the will dies. As a result, the testamentary trust does not automatically prevent your assets from passing through probate or administration. A trustee is appointed to administer the property subject to the trust for the benefit of a beneficiary. Among other things, a testamentary can be used to manage and protect the assets of minor and other individuals. Of course, a living trust may be utilized as well.

Talk to us about testamentary trusts and living trusts, as they pertain to your estate planning needs. Contact us today for your estate planning consultation.
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Living Wills


Q: What Is a Living Will?

A living will is another type of advance directive. It is an expression of intent with respect to the patient's desire to terminate life support under circumstances where the patient is terminal, unconscious and there is no reasonable expectation of recovery.

Unlike most other states, New York does not have a Living Will Statute. Thus, there is no standard form for a living will and no legislation directing its enforcement. The New York Court of Appeals, however, has indicated that a living will may be used to establish clear and convincing evidence of a patient's wishes regarding health care.

Talk to us about living wills and health care proxies, as they pertain to your estate planning. Contact us today for your estate planning consultation.
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Powers of Attorney


Q: What Is Powers of Attorney?

Among the documents one should consider as part of a modern estate plan is the durable power of attorney. Through this document you can name an agent (and an alternate) who will be responsible for managing your assets, paying your bills and engaging in other financial activities if you are unable to do such things for yourself. A durable power of attorney, then, is a key document for administering and protecting the assets that are part of your estate.
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Q: Who Are the Parties to a Power of Attorney?

The person signing the power of attorney and thus granting the powers is the 'principal'. The principal grants these powers to a person who acts as the principal's agent. This agent is referred to as an attorney-in-fact. The principal may designate more than one attorney-in-fact and may specify whether they may act separately or must act jointly.

Sound complex? It can be. Contact us today for your estate planning consultation.
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Q: What Makes a Durable Power of Attorney "Durable"?

The New York statutory short form durable power of attorney contains the word "durable" because it continues even with a disability or incompetence of the principal.
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Q: What Can My Attorney-In-Fact Do?

There are several powers enumerated in New York's statutory short form durable power of attorney. The principal must initial a box next to the specific power that the attorney-in-fact will be authorized to exercise. These powers, as they appear in the statutory short form, are:

  • Real estate transactions;
  • Chattel and goods transactions;
  • Bond, share and commodity transactions;
  • Banking transactions;
  • Business operating transactions;
  • Insurance transactions;
  • Estate transactions;
  • Claims and litigation;
  • Personal relationships and affairs;
  • Benefits from military service;
  • Records, reports and statements;
  • Retirement benefit transactions;
  • Making gifts to my spouse, children and more remote descendants, and parents, not to exceed in the aggregate $14,000 to each of such persons in any year;
  • Tax matters;
  • All other matters;

In addition to the powers enumerated in the statutory short form, the principal may include special provisions. These special provisions must conform to certain requirements found in New York General Obligations Law, § 5-1503.
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Q: If I Fill Out a Durable Power of Attorney Form, Does It Give My Attorney-In-Fact the Right to Use My Assets for His or Her Own Purposes?

No. Remember an attorney-in-fact is your agent. New York courts have consistently found that the attorney-in-fact must act in the utmost good faith and undivided loyalty toward the 'principal' (their client: you!), and must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing.

In other words, the attorney-in-fact is authorized only to act on your behalf and in your best interests. An attorney-in-fact who uses your assets for his or her own purposes may face civil or criminal liability for breach of his or her fiduciary duties.
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Q: Does a Power of Attorney Have to Be Notarized?

Yes. A notary public must witness your signature, sign the power of attorney form, and include his or her licensing information.
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Q: Will My Bank Accept a Durable Power of Attorney?

It should if the durable power of attorney is properly filled out and acknowledged. General Obligations Law § 5-1504 requires banks and other financial institutions to accept a properly executed durable power of attorney.
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Q: Can I Authorize My Attorney-In-Fact to Exercise Other Powers?

Yes. You may include special provisions in the statutory Powers of Attorney form, placing limitations on the enumerated powers or expanding upon them. Some special provisions that may be considered include authorizing the attorney-in-fact to:

  • create a revocable or irrevocable living trust;
  • access the principal's safe deposit box and remove or add to the contents of the box;
  • have access to medical records and disclose such information;
  • make gifts beyond those specified in the statutory short form; and,
  • reimburse the agent under a Health Care Proxy for any reasonably incurred costs (including legal fees) while acting pursuant to the proxy.

Talk to us about estate planning tools and techniques such as the "power of attorney". Contact us today for your estate planning consultation.
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Q: Why Would I Want to Include These Special Powers?

In some instances, you and your attorney will find the standard powers do not adequately meet your needs. For example, the authority to access and disclose medical records is not included in the standard powers, and wish to include that power. Such authority may make it easier for the attorney-in-fact to obtain benefits based on a health condition.
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Q: Aren't Such Powers Implied as Part of the Attorney-In-Fact's Authority?

Not exactly. Although the powers enumerated in the standard power of attorney form are commonly believed to be quite broad, courts have been reluctant to grant an attorney-in- fact any authority not specifically granted. So while a durable power of attorney can be a very powerful document, the attorney-in-fact is limited to those powers specifically granted by you.
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Q: Can I Revoke a Durable Power of Attorney?

Yes, you may revoke a durable power of attorney at any time. New York law currently has not established procedure for revocation, however. Nonetheless, a separate written document may be used to revoke a previously executed power of attorney. If a copy of a power of attorney has been given to a bank, brokerage firm or other institution, that institution should be notified of the revocation. It is important, therefore, that you keep a list of all institutions and individuals that have a copy of the power of attorney so that you will have a record of whom to notify in case of revocation.
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Q: Can My Attorney-In-Fact Settle My Estate Upon My Death?

No. The attorney-in-fact exercises power according to the authority granted in a power of attorney. The powers conferred upon the attorney-in-fact terminate upon the principal's death. The attorney-in-fact therefore would have no authority to settle an estate upon the principal's death.

Talk to us about estate planning tools and techniques such as the "power of attorney". Contact us today for your initial estate planning consultation.
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The Health Care Proxy


Q: What Is a Health Care Proxy?

Under New York's health care proxy law, any competent person can authorize another person, usually a family member, to make health care decisions, if the patient becomes unable to do so.

This is done by completing the standard health care proxy form, noting the person you are designating to make decisions, noting any specific decision that you want the person you are designating to make, and by signing the document in front of two witnesses.
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Q: Why Do I Need a Health Care Proxy?

Without a health care proxy, your doctor may be required to provide you with medical treatment that you would have refused if you were able to do so. For example, your doctor may be required to provide you with artificial nutrition and hydration, a respirator, or CPR, even though you are in a coma with no hope of recovery, or are terminally ill.
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Q: When Does It Take Effect?

The health care proxy becomes effective only when you become unable to make decisions, as determined by a physician. Until then, you continue to be in charge of making your own health care decisions. It can be revoked orally, and you always have the right while competent to sign a new health care proxy.
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Q: How Is a Health Care Proxy Different Than a Power of Attorney?

A health care proxy is different than a power of attorney. A power of attorney primarily authorizes the person you designate to make financial decisions for you. It cannot be used to make health care decisions. You must complete a health care proxy in order to have an agent to make health care decisions when you are not able.
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Q: Should I Discuss the Appointment of an Agent with Anyone Before I Fill Out the Form?

Appointing a health care agent is an important decision. You should discuss it with your family, close friends, your doctor, your attorney, and certainly with the person you are appointing.
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Q: Does the Health Care Proxy Form Have to be Notarized?

No, it does not. However, it must be signed in the presence of two witnesses.
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Q: Can I Appoint More Than One Person to Act as Agent?

You can name a substitute or fill-in agent to act if the person you appoint as your principal health care agent is unable or unwilling to act. However, you cannot have two health care agents acting on your behalf at the same time.
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Talk to us about estate planning tools and techniques such as the Health Care Proxy. Contact us today for your estate planning consultation.