Wills, Estates & Probate
Estate Planning Means Planning Ahead
The issue of how to plan for distribution of your hard earned assets deserves your attention in order to guarantee that your wishes will be reflected without great expense, complications or delay. Everybody wants to have a say in what will happen to his or her property upon death who will get it, how much of it will be taxed and so forth. For some people, setting up an estate plan may also include strategies, such as setting up trusts that will reduce the amount of taxes that have to be paid during their lifetime or upon their death.
Unless you have a properly prepared, signed and witnessed Will, New York State law will determine the distribution of your assets upon your death. This law is called the law of Intestacy. Many people mistakenly believe that when a married person with children dies without a will, the surviving spouse gets all the property. THIS IS UNTRUE. In New York, the surviving spouse will receive the first $50,000.00 of the estate, plus one-half of the residue, with the balance divided equally between the surviving children. If any child is under 18 years of age at the time of the parent’s death, such child’s inheritance will be placed in a trust fund. Even if the surviving spouse is appointed trustee by the Court, prior approval of the Court will be necessary to pay for expenses such as the child’s education, clothing or living costs. An annual accounting of income and expenses will be required. Having a properly prepared Last Will and Testament will prevent this potential nightmare.
Another very important reason to have a will prepared is so that the parents can select a guardian for their minor children in the event of the death of both parents. Without a will, the Court determines who will raise your children.
For those whose Estates exceed the Federal Estate Tax Exemption (remember Life Insurance benefits are included in the total), it is important to consider minimizing estate and gift taxes. A marital deduction trust can be set up by your attorney, which wills double the amount that is free from federal estate taxes.
Three additional documents are also essential to the planning process. They are the Living Will, Health Care Proxy, and Durable Power of Attorney.
The Living Will enables you to provide instructions as to the use of life-sustaining treatment in the event you are terminally ill or suffering from an illness or injury with no chance of recovery.
A Health Care Proxy enables the person of your choice to make any and all health care decisions for you in the event you are incapable of making them yourself. The proxy can provide for specific instructions as to any and all medical treatment.
These documents can save your family unnecessary grief and anguish in the event you become permanently unconscious with no expectation of recovery. In essence, these documents can aid your family in convincing a doctor or hospital to end life support. The alternative is to apply to the Court to direct the doctor or hospital to withhold treatment. This is obviously a costly, time consuming and painful alternative.
A Durable Power of Attorney permits the person of your choice to act on your behalf regarding financial decision making. This will avoid the need for Court intervention in order to access your bank accounts and/or pay bills in the event you are unable to do so.
It may also be a crucial tool to enable a person in need of nursing home care to qualify for Medicaid-thus saving thousands of dollars in health care costs.
These planning tools should be discussed with a competent attorney since each document has specific requirements and execution formalities. Both you and your loved ones can be protected with proper planning.