August is National Make-A-Will month, an annual reminder for individuals and married couples to either create or update their Will and other estate planning documents. A basic comprehensive estate plan should, in the very least, include a Last Will and Testament, a Durable Power of Attorney, a Health Care Power of Attorney, and a Living Will (also known as a medical directive or health care treatment instructions). These documents allow an individual to dispose of property at death and facilitate the management of an individual’s financial affairs and medical care for convenience purposes or in the event of incapacity during life, thereby avoiding the necessity of a court appointed guardian.
Why Make a Will?
Every estate plan should include a Last Will and Testament. Specifically, a Will directs the disposition of real and personal property upon an individual’s death. A Will can also provide for specific and charitable bequests and create different types of trusts for the benefit of a surviving spouse and children, including children with special needs, as well as provide for dispositions to other beneficiaries. Even for married couples or individuals without significant assets, one of the most important features of a Will is the ability to appoint a guardian for minor children in the event both parents are gone. In addition, a Will designates an Executor, that is, the individual or entity who has the legal authority to act on behalf of the estate, wind-up the affairs of the decedent, pay debts, expenses and taxes, and carry out the provisions of the Will. A Will can also appoint trustees to manage and oversee any trusts created under the Will and should provide for a series of successors for these key roles. Lastly, a Will can set forth directives for certain assets to be sold or retained as well as provide for the management of closely held business interests and digital assets (such as email, social media accounts, and documents stored in a cloud).
Other Estate Planning Considerations
In addition to preparing a Will, every individual should prepare financial and health care powers of attorney. A Durable Power of Attorney (“POA”) is equally as important as a Will in that it allows an individual (called the “principal”) to designate an agent to handle financial matters on the principal’s behalf, including banking and gifting transactions, in the event of the principal’s incapacity or for the principal’s convenience. POAs can be broad or limited in nature, and although it is generally advisable for most clients to execute the former for incapacity planning purposes, more limited powers of attorney may be desired in specific situations where the principal may be unavailable, but not necessarily incapacitated (i.e., to sell a car or to undertake a specific transaction that may be limited in duration).
Similarly, a Health Care Power of Attorney allows the principal to designate an agent to make medical decisions on the principal’s behalf in the event the principal is unable to communicate those decisions due to disability or incapacity, as well as the ability to access the principal’s medical records and correspond with health care providers. A Living Will, provides the agent with instructions regarding the initiation, continuation, withholding, or withdrawal of life-sustaining treatments if the principal has been diagnosed with an end-stage condition, or if the principal is in a permanent coma as determined by treating physicians. Both documents can also set forth preferences with respect to organ donation.
In certain circumstances, a Revocable Trust may also be advantageous in creating a comprehensive estate plan. A Revocable Trust, also known as a Living Trust, is another widely used estate planning technique where an individual (called the “settlor” or “grantor”) establishes a trust during his or her life and retains the right to amend or revoke the trust at any time. Generally, the property contributed to a revocable trust will be used primarily for the settlor’s benefit during life and at the settlor’s death, the remaining assets will be distributed to beneficiaries designated by the settlor (often the settlor’s spouse and children) either outright or in further trust. Trusts also include “spendthrift” or creditor protection provisions so that no beneficial interest will be subject to creditor claims (including tort or professional negligence judgments, as well as claims of a divorcing spouse) until actual distribution to the beneficiary. Aside from this flexibility, Revocable Trusts are also advantageous in that they provide asset management in the event of the settlor’s incapacity or physical disability and help simplify the estate administration process at the settlor’s death. In fact, by placing real estate situated in another state (i.e., a vacation property) into a Revocable Trust, ancillary probate in that state may be avoided altogether, which could ultimately save the decedent’s estate time and money.
For those individuals or married couples without any estate planning documents, National Make-A-Will month is a great opportunity to finally start the process. By taking the time to create your Will and Powers of Attorney now, you can achieve peace of mind and provide clarity for your loved ones. And for those who already have estate planning documents in place, this month is a great time to review the provisions of your existing documents to determine their effectiveness due to the passage of time and to see if your wishes have changed regarding any beneficiaries.
Updates for 2026: Federal Gift and Estate Tax Update: For 2026, the federal gift and estate tax exemption amount is $15 million per individual (or $30 million for a married couple, assuming portability is available). In addition, the annual federal gift tax exclusion remains $19,000 per recipient for 2026. This means an individual can give up to $19,000 to any number of recipients during the year without using any portion of their lifetime exemption. Married couples can generally gift up to $38,000 per recipient through gift-splitting.
Kleinbard’s Trusts and Estates attorneys are available to help individuals and families prepare or update their estate planning documents. For more information, please contact Franca Tavella or Jennifer Zegel.
