Understanding Wills, Trusts, Powers of Attorney, and Health Care Proxies
Estate planning is not just for the wealthy or the elderly—it’s for anyone who wants to ensure that their wishes are respected, their loved ones protected, and their affairs handled smoothly when they no longer can.
At Good Pine, we help clients across New York and New Jersey navigate every aspect of estate planning, from drafting a simple will to establishing comprehensive trust structures.
1. The Foundation: Wills
A Last Will and Testament is the cornerstone of most estate plans. It allows you to:
Decide who receives your property after your death
Appoint a guardian for minor children
Name an executor to administer your estate
Express your final wishes—such as charitable gifts or funeral arrangements
Why Having a Will Matters
If you die without a will—known as dying intestate—state law decides who inherits your property and who administers your estate. The rules differ in each state, but generally:
Your spouse and children share your estate according to a fixed statutory formula.
If you have no spouse or children, your assets could pass to parents, siblings, or even distant relatives.
If no relatives can be found, your assets may eventually escheat to the state.
In addition, the court—not you—chooses who will serve as the guardian for your minor children and who will manage your estate. This process can create delays, added expenses, and family conflict.
Having a will prevents these complications. It gives you—not the law—the authority to decide how your property will be handled, who will care for your dependents, and who will oversee the settlement of your estate.
The Will as a Safety Net
Even for those who also create a trust, a will remains essential. A will serves as a safety net for any assets that were never transferred into the trust, ensuring they are still distributed according to your wishes. This is sometimes called a “pour-over” will, because it directs any remaining property to “pour over” into your trust at death.
For guidance on how to help your loved ones locate and identify your financial assets, see “Keeping Track of Your Assets” below.
2. What Is Probate?
Probate is the court-supervised process of validating a will, identifying assets, paying debts, and distributing property to beneficiaries.
In New York and New Jersey, probate can take several months and involves filing documents with the Surrogate’s or Probate Court. The process becomes more complex if there are disputes, multiple properties, or out-of-state assets.
While probate is not always burdensome, many people seek to minimize it to save time, maintain privacy, and reduce administrative costs. Proper planning—through trusts, beneficiary designations, and joint ownership—can streamline or even avoid the probate process entirely.
3. Trusts: Powerful Tools—But Not Always the Solution
A trust is a legal arrangement in which one party (the grantor or settlor) transfers ownership of assets to another party (the trustee) to hold and manage for the benefit of a third party (the beneficiary).
There are many types of trusts—revocable, irrevocable, special-needs, and charitable—but the most common starting point is the revocable living trust.
What Happens When You Set Up a Revocable Trust
When you create a revocable living trust, you (the grantor) often serve as both the trustee and the beneficiary during your lifetime. The trust uses your Social Security number and reports income under your name.
However, simply signing the trust document is not enough. You must fund the trust by transferring ownership of assets—such as real property, bank accounts, or brokerage accounts—from your individual name into the name of the trust.
Hypothetical: Suppose an individual owns a home in Bergen County and places it into a revocable living trust. The deed must be updated to show ownership by the trustee of the trust, rather than by the individual personally. Without that transfer, the home would still pass through probate at death, despite the existence of the trust.
Hypothetical: Similarly, if someone owns shares in a closely held business, those shares must be re-registered in the name of the trust—usually by updating the company’s records or issuing a new stock certificate. This ensures that the trust—not the individual—is recognized as the legal owner, allowing for a smooth transition to the successor trustee upon the grantor’s death.
When the Trust Becomes Irrevocable
Upon the death of the grantor, a revocable trust automatically becomes irrevocable, meaning its terms can no longer be changed. The successor trustee, previously designated in the trust document, then steps in to manage and distribute the trust property according to your instructions. This transition eliminates the need for probate and ensures a smoother administration of your estate.
Why a Trust Isn’t Always the Right Fit
Despite their advantages, trusts are not one-size-fits-all. Establishing and maintaining a trust involves legal fees, administrative upkeep, and title transfers that may be unnecessary for smaller or simpler estates.
Hypothetical: For example, an individual with modest assets—such as a checking account, a vehicle, and a single residence—might achieve the same objectives through a well-drafted will and updated beneficiary designations, without the added expense of trust maintenance.
Moreover, not all assets can or should be transferred into a trust. For example, retirement accounts such as IRAs or 401(k)s generally pass through beneficiary designations, not through a trust. Improperly retitling these accounts could create unintended tax consequences, which is why it’s essential to consult an accountant or tax advisor before making such changes.
4. Beneficiary Designations and Non-Probate Transfers
Certain assets pass automatically to designated beneficiaries and are not controlled by your will or trust. These include:
Life insurance policies
Retirement accounts (IRAs, 401(k)s, pensions)
Transfer-on-death (TOD) or payable-on-death (POD) accounts
Some jointly owned bank or brokerage accounts
It’s important to keep these designations up to date, especially after major life events such as marriage, divorce, or the birth of a child. Outdated beneficiary designations can override your will and send assets to unintended recipients.
A comprehensive estate plan reviews these designations alongside your will and trust to ensure consistency.
5. Keeping Track of Your Assets
A well-crafted will or trust is only effective if your loved ones and fiduciaries know what assets actually exist.
Even when you have designated beneficiaries for certain accounts, those designations don’t help if no one knows where the accounts are held or how to locate them.
For this reason, estate planners often recommend creating a private asset inventory or letter of instruction—a separate, non-legal document that lists your key financial accounts, insurance policies, digital assets, and professional contacts.
Hypothetical: Suppose a person has a checking account, two investment accounts, and an insurance policy—each with designated beneficiaries. If family members do not know these accounts exist, the funds may remain unclaimed for months or even years. A private asset list, stored securely with estate documents, helps your executor or loved ones identify and claim these assets promptly.
Because wills become public once probated, it is best not to include account numbers or sensitive financial details in the will itself. Instead, the will names your executor, and the executor uses the separate inventory to locate and manage your assets efficiently.
At Good Pine P.C., we encourage clients to maintain this confidential asset list alongside their legal documents and to update it periodically, especially after major life or financial changes.
6. Powers of Attorney: Managing Financial Affairs
A Durable Power of Attorney (POA) authorizes a trusted person (your agent) to handle financial and legal matters on your behalf if you become incapacitated. This may include paying bills, managing investments, or completing property transactions.
Without a valid POA, your family may need to pursue a court-appointed guardianship—a costly and time-consuming process that can easily be avoided with advance planning.
7. Health Care Proxies and Living Wills: Protecting Medical Decisions
A Health Care Proxy (or Advance Directive) designates someone you trust to make medical decisions on your behalf if you cannot communicate.
A Living Will complements this by expressing your wishes about life-sustaining treatments such as resuscitation, artificial nutrition, or hydration.
Together, these documents ensure that your medical care aligns with your values and spare your loved ones from having to make painful decisions without guidance.
8. Common Estate Planning Mistakes
Many estate plans fail not because of poor intentions but because of preventable errors. Some of the most common include:
Failing to fund a revocable trust after signing it
Forgetting to update wills or beneficiary designations after major life events
Assuming a will avoids probate entirely
Relying on online templates that may not meet state-specific requirements
Overlooking coordination with tax or financial professionals
A periodic review of your plan—ideally every few years or after significant life changes—can prevent these problems.
9. Taxes and Estate Planning: A Vital Distinction
It’s important to understand that estate planning law and tax planning are related but distinct.
At Good Pine, we do not provide tax advice.
Because tax treatment varies depending on your income, asset structure, and state residency, you should always consult a certified public accountant (CPA) or qualified tax professional to evaluate potential tax consequences before implementing any estate plan.
The best results often come from collaboration among your attorney, accountant, and financial advisor—each bringing specialized expertise to your overall strategy.
10. Coordinating the Whole Plan
An effective estate plan weaves these instruments together—each supporting the others:
Your will ensures proper distribution of non-trust assets.
Your trust provides continuity and avoids probate.
Your power of attorney keeps your financial affairs functioning during incapacity.
Your health care proxy and living will protect your medical autonomy.
Your beneficiary designations ensure a seamless transfer of key assets outside of probate.
At Good Pine, we design coordinated plans that reflect your goals, family dynamics, and financial realities—balancing simplicity with foresight.
11. Frequently Asked Questions
What is the difference between a will and a trust?
A will directs the distribution of assets after death and requires probate. A trust holds property during your lifetime and can pass it directly to beneficiaries without probate.
Can I name more than one executor or trustee?
Yes. Many people appoint co-executors or co-trustees for practical or family reasons. However, naming too many can slow decision-making, so it’s important to choose carefully.
How often should I update my estate plan?
You should review your plan at least every three to five years or after major life events such as marriage, divorce, childbirth, or significant financial changes.
Is probate always bad?
Not necessarily. For smaller estates or uncontested matters, probate can be relatively simple. The key is to structure your estate so that the process matches your family’s needs and goals.
12. Taking the Next Step
Whether you’re creating an estate plan for the first time or updating an existing one, our goal is to make the process clear, practical, and tailored to your needs.
Legal Disclaimer:
This article is provided for general informational purposes only and should not be construed as legal or tax advice on any specific facts or circumstances. The information contained herein may not reflect the most current legal developments and is not intended to create, and receipt of it does not constitute, an attorney–client relationship. Readers should not act upon this information without seeking professional counsel licensed in their jurisdiction.
If you have questions regarding your particular situation, please contact an attorney at Good Pine P.C. to obtain advice tailored to your needs.
