What is Estate Planning?
Estate planning is the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life, in the event the person becomes incapacitated and after death.
The most basic step in estate planning involves writing a Will. Other major estate planning tasks include the following:
- Limiting estate taxes by setting up trust accounts in the names of beneficiaries.
- Establishing a guardian for living dependents
- Creating or updating beneficiaries on plan such as life insurance, IRAs and 401(k)s.
- Setting up funeral arrangement.
- Establishing annual gifting to qualified charitable and nonprofit organization to reduce the taxable estate.
- Naming an executor of the estate to oversee the terms of the will
- Setting up a durable power of attorney (POA) to direct other assets and investments
Reasons for Estate Planning.
An Estate Plan Protects Young Children
Nobody thinks of dying young, but if you’re the parent of small children, you need to prepare for the unthinkable. This is where the will portion of an estate plan comes in; to ensure that your children are cared for in a manner of which you approve, you’ll want to name their guardians in the event that both parents die before the kids turn 18. Without a will that names these guardians, the courts will step in to decide who will raise your children.
An Estate Plan Spares Heirs a Big Tax Bite
Estate planning is all about protecting your loved ones, which means in part giving them protection from the Internal Revenue Service (IRS). Essential to estate planning is transferring assets to heirs with an eye toward creating the smallest possible tax burden for them. Even just a bit of estate planning can enable couples to reduce much or even all of their federal and state estate taxes and state inheritance taxes.
Writing a Will
A willis a legal document created to provide instructions on how an individual’s property and custody of minor children, if any, should be handled after death. The individual expresses their wishes through the document and names a trustee or executor that they trust to fulfill their stated intentions. The will also indicates whether a trust should be created after death. Depending on the estate owner’s intentions, a trust can go into effect during their lifetime (living trust) or after their death (testamentary trust).
The authenticity of a Will is determined through a legal process known as probate.
Probate is the first step taken in administering the estate of a deceased person and thereby distributing assets to the beneficiaries. When an individual dies, the custodian of the Will must take the Will to the probate court or to the executor named in the Will within 30days of the death of the testator.
The probate process is a court supervised procedure in which the authenticity of the Will left behind is proved to be valid and accepted as the true last testament of the deceased.
Importance of Estate Planning:
It protects the young inheritors:
The age gap between parents and children could sometimes be big. The parents always get worried about the future of their young children. The only thing that guarantees a secure future for young children is a perfect estate planning.
Helps you to avoid probate:
Among many things, you really don’t want this probate thing to happen to you. Probate is the court-authorized process of verifying your will (if you have one), estimating the value of your estate, paying off any unpaid taxes and bills and then distributing your remaining assets to the rightful inheritors (whoever the court deems.
Helps you to avoid a family dispute:
Most family dispute occurs during the distribution of property. Things could be messier if you have multiple marriages, and there are children in every marriage. You don’t want this mess to see the court if you can. Estate planning is the only way to save your family from this type of contention.
Restrict children’s access to the assets:
Getting control of a lot of wealth, all of a sudden may not be a good thing for your children. You want your children to inherit your assets. But you don’t want your children to spoil all of your wealth or get spoiled by your wealth.
Advantages of Estate Planning
- Provide for your immediate family. …
- Ensure property goes to the right beneficiaries.
- Minimize the expenses and taxes.
- Ease the burdens of your family.
- Support a favorite cause.
- Plan for any kind of incapacity.
- Reduce taxes that take place on your estate.
Get professional assistance from an estate planning attorney NYC
As there are legal requirement binding the validity of each document, it is very essential you get expert legal help to prevent costly mistakes. And to ensure your document complies with New York state laws and that your POA is the type befitting your situation, call our estate planning attorneys NYC today for expert assistance.