Four cornerstones of estate planning

Four cornerstones of estate planning
  • Estate planning for distribution of assets

The fundamental reason why people carry out estate planning is to distribute their assets. Through proper estate planning, you get to leave assets for only those who you desire to receive from you. Otherwise, only certain people (your spouse and children if they’re alive) can inherit from you, whereas you may have a cousin or charity organization you would like to fund. To ensure the effective distribution of your possessions when you die, an estate planning lawyer can help you create a will or trust.

Will: a will is simplest and most popular estate planning document. On your will, you name your beneficiaries and what portions of your estate you want bequeathed to them. If you have minors, you can also name a guardian for them in your will. Although a will is often simple, you would require the services of an estate planning attorney if you own complex assets, you own property in other states other than you live, and your family is complicated or estranged.

Living Trust: A trust also transfers assets to your beneficiaries. However, it is more complex than wills. It is often preferably because whereas all wills have to go through probate, a trust doesn’t. Hence, your loved ones can inherit discreetly without public awareness. It is never advisable to try executing a living trust on your own, as there is much legality involved.

  • Estate planning for Incapacity

As you get older, you may be worried that someday you may become unable to handle your own personal affairs, let alone the financial ones. However, what if you’re told you could make plans towards that now? Yes, you could lay down instructions now to ensure that your affairs are managed by someone of your choosing. By so doing, you would have a say even when you can’t make decisions due to Alzheimer’s or dementia. Our estate planning lawyers can help you establish a:

Power of attorney: A power of attorney is Powerful document by which you appoint an agent – called an attorney-in-fact – to make financial decisions on your behalf. This is used very useful in incapacity planning so that you would have someone to manage your affairs if you become unable to do so.

Healthcare surrogate: Your healthcare surrogate or Medical power of attorney enables you authorize an individual to make medical decisions on your behalf when you become unable to make them yourself.

Living will: You may have certain preferences when it comes to your end-of-life matters. Possibly, in a case the chances of your survival are very slim, you may like a part of your body to be used to save someone else life instead, such as a kidney or heart transplant. You may prefer to be kept on life-support indefinitely until life or death comes, or choose not to so as to save cost for your family. You can’t make such decisions then because you probably would be in coma, so you have to make the choices now by writing them in a document known as a living will.

  • Estate taxes and probate consideration

Probate, which is usually done to determine the authenticity of a will, is every estate beneficiary nightmare. Thus, all estate planning professionals will advise their clients to create an estate plan that avoids this challenging process.  Moreover, you may have assets and estate properties in states other than where you live. Usually, this means an additional probate proceeding becomes necessary. This is secondary probate process is termed the ancillary probate. An additional probate would mean that more time is spent than usual and parties involved could get tired. You need a good probate lawyer in such cases.

Another thing to consider when making estate plans is estate taxes. When a person dies leaving valuable estate, the estate may be charged a tax known as estate tax. Notably, not all estates are subject to estate taxes; it depends on the total value of the estate, whether it passes a threshold.

If the entire estate value is below this threshold amount, the estate will not be taxed. But if it is larger than the exemption amount, then an estate tax will be imposed. As such you need to know where your estate stands.

  • Estate plan document update

While you may think estate planning is a once-and-for-all affair, it is not so. Your documents require updates from time to time to keep up with the ever-changing laws and your estate situation. A named beneficiary or fiduciary may pass away, and you may get divorced, acquire or lose property. Each of these scenarios will require a relative change in the respective document. As such, you need to keep in mind situations that may require you to update or revise your estate documents. Contact an estate planning attorney when you need to make these changes.

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