Familiarize Yourself with These Common Estate Planning Terms
After working hard all your life to provide for yourself and your family, an accident, illness, or chronic medical condition can easily jeopardize your financial security. It can also leave your loved ones facing difficult decisions while dealing with complicated legal processes. Understanding what estate planning is and what it entails can help ensure you and your loved ones are protected. The following can help you familiarize yourself with some of the common terms used when creating an estate plan and how they may apply to your situation.
Common Terms in Estate Planning
Estate planning involves putting documents in place to protect you in the event of an unexpected injury or illness, or in the event of your death. Even if you are just starting out in your career and have minimal property and assets, creating an estate plan can help ensure what you do possess goes to the people closest to you. It also provides the assurance that important plans or decisions that need to be made are in accordance with your wishes.
One of the first issues to clarify is what constitutes your estate. It includes any real estate, cars, home furnishings, or other property you own, as well as your financial accounts, such as savings, investments, and retirement benefits. The following are some common estate planning terms you will want to be familiar with:
If an accident or illness leaves you unable to communicate your wishes, advance directives let your loved ones and doctors know what types of medical care and treatment you want. The New York Department of Health urges all residents to have a living will in place and to consider their wishes regarding Do Not Resuscitate (DNR) orders.
Power of Attorney
Having a power of attorney (POA) in place grants authority to someone you trust to manage your business and financial if you are unable to do so yourself. A health care POA or proxy grants the authority to make medical decisions on your behalf.
A trust allows you to transfer ownership of money and property to a separate account, while still giving you access to it and control over how it is spent. Trusts can prove useful in providing for family members as well as in Medicaid planning, to protect you against the high costs of nursing home care.
The New York Probate Court decides what will happen to your property and assets in the event of your death. Probate can be a time consuming, and costly process. Having a legally valid and updated will in place makes it easier and allows you to select those who will inherit from your estate.
Reach Out to Us Today for Help
These are only some of the terms that come up during estate planning. At Cavallo & Cavallo, we can advise you on the exact type of legal documents needed to protect you and your loved ones. Contact our New York estate planning attorneys and request a confidential consultation in our Bronx or Westchester office today.