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Estate planning is a means of protecting your estate (assets, property, inheritances, etc.) in order to make sure that it is handled the way you would want it to be handled in the event of your death or an incapacitating illness. This gives you (and possibly your spouse) the power to determine what happens with everything you own once you die.
Estate planning is not just a means of planning how things are passed on when you die, but also a means of protecting against liens from creditors (Medicaid/Medicare, for example), minimizing tax consequences (currently and eventually for beneficiaries), planning for medical incapacity (so that family members are not burdened with making decisions for you that may not be what you would have wanted), and providing a meaningful legacy for your family, loved ones and possibly charities. Perhaps most importantly, if you have young children, an estate plan gives you the opportunity to designate a guardian for your children if your spouse does not survive you.
Estate planning offers a level of security to you and your family, so that if something tragic does occur, you can rest assured that your family members (no matter their age) are cared for appropriately.
Many of the steps you can use to protect yourself must be taken well before you get sick and need Medicaid nursing home care or are in the hospital and require emergency treatment. It is important to speak with a an attorney to understand what your options are and to put a detailed estate plan into place while you are still of sound mind and sound body.
A typical estate plan includes a will, a trust, a durable power of attorney and a living will.
An estate is made up of the total property owned by a person, including both assets (such as real estate) and liabilities (such as mortgages or debts). Property may be real property and/or personal property. Real property includes items such as houses, apartment buildings, land, and commercial buildings. Personal property includes items such as vehicles, jewelry, art, collectibles, musical instruments, furnishings, any type of equipment, boats, bank accounts, stock portfolios, insurance policies, cash, retirement funds, notes or loans that are receivables, and more.
It is common to think of an estate in terms of only the rich, but most people have something that constitutes a personal estate and therefore should take steps to protect it.
If you die without a will or trust in New York State, the state court determines how your property and assets are distributed during probate. An executor is appointed by the Surrogate's Court according to New York's law of intestate succession and your estate passes to your heirs-at-law regardless of your wishes and how you want your assets distributed.
Whether a will or a trust (or a combination of the two) is the better tool to use in an estate plan depends on what is in involved in the estate and what your objectives are.
A will is often a better choice when the estate is small enough that the probate process is not required or when it is relatively easy to leave the estate through a plan using beneficiaries and/or joint tenancy of property ownership.
A trust is often the better choice when there is a chance of major associated taxes, when you want to hold a percentage of the estate in a trust fund to a be paid out gradually to an heir (at college graduation, for instance), or when the estate owner is mentally incapacitated and therefore cannot make financial decisions.
A trust is a legal entity set up to take care of property for the benefit of heirs and beneficiaries.
A trust is a contract between two parties for the benefit of third parties. A grantor (owner of the estate) and a trustee (manager of the estate) create a private legal agreement wherein the trustee will protect, control, and transfer the property to the heirs according to the terms of the agreement. A living trust mean the grantor maintains all three of the trust positions; he or she serves as grantor, trustee, and beneficiary.
There are many kinds of trusts, the most common being revocable and irrevocable trusts. Revocable trusts (also called living trusts) are created during your lifetime and you, as the grantor, maintain control over the trust. An irrevocable trust, on the other hand, cannot be altered without the consent of the beneficiary.
Working with an attorney experienced in estate planning will allow you to develop an estate plan that clearly communicates and protects your wishes.
There are many different types of trusts and the benefits depending on what type of trust you choose. In general, trusts have many advantages such as avoiding probate, which can be a lengthy process, avoiding or reducing certain taxes and avoiding certain claims by creditors. In the case of Special Needs Trusts, you may be able to provide benefits to a physically or mentally disabled beneficiary without causing him or her to lose government benefits.
Probate is the name of a court-supervised process through which your assets and property (i.e., your estate) are distributed after your death.
Those who want to authenticate and move forward with (i.e., execute) the will of a loved one will need to go through this process if the monetary value is above a certain level.
Probate can be a simple or difficult process depending on how clearly the estate plan/will is written and how well it is handled in the aftermath by the parties involved.
In the state of New York, there are a number of ways in which you can potentially avoid probate, most commonly form by establishing a living trust. This can offer probate protection for essentially all of your assets including any real estate, vehicles, bank accounts, retirement funds, etc.
Another way you may be able to avoid the process of probate is by having some form of joint ownership of your property. For example, you may choose to have a separate estate plan, and if your spouse shares in the ownership of the home is still alive when you die, then your spouse will have the right of survivorship, therefore avoiding probate. Joint property in the State of New York comes in one of two ways: joint tenancy or tenancy by the entirety. Joint tenancy applies when a couple used their shared account to buy their property together, regardless of whether or not they are married. As long as they are considered to hold an equal share in the property, when one dies the other will rightfully take full ownership. Tenancy by the entirety applies only to married couples, providing the same right to take full ownership as mentioned above.
No, this is not possible in New York State. In certain states, to avoid probate you can use a deed like a will to transfer property such as real estate to a beneficiary after your death to avoid probate. These deeds are called Transfer on Death (TOD) deeds. However, TOD deeds are not permissible in New York. Instead you must deed your property directly to the beneficiary, or to a trust to be held for your beneficiary, until your death.
The probate process begins with the initial submission of the will and concludes with the final distribution of assets to the beneficiaries. How long the process takes depends on many factors, including the complexity of the will, the value of the estate, the nature and complexity of the assets and debts, the number of beneficiaries and any difficulty contacting them, and whether the will is contested.
The New York State Elder Law was originally enacted in 1965 as part of the Executive Law, Article 19-J (Ch 444, L 1965) and governs the State Office for the Aging and the Area Agencies on Aging. In 2004, the New York State Legislature created the Elder Law (Ch 642, L 2004) in order to provide a new level of focus on issues affecting older New Yorkers and to better identify policy and programs for older New Yorkers. Please click here to learn more.
This information, based on New York law, was provided courtesy of The Law Office of Christopher J. Arrigali, P.C. It is intended to inform, not to advise. No one should try to interpret or apply any law without the assistance of legal counsel.
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