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Long Island Elder Law Blog

Setting up a special needs trust

Some New Yorkers who are creating an estate plan may be concerned about how they will take care of a family member with disabilities. These disabilities may include genetic disorders, cerebral palsy, bipolar disorder or autism spectrum disorder, and they may be congenital or the result of an injury.

Many people who suffer from disabilities get government assistance, but it is necessary for a person to have assets under a certain amount to qualify. With a special needs trust, the assets do not belong to the beneficiary, so they are not counted toward the maximum and do not affect the person's access to benefits. Money in a special needs trust can support a person in a variety of ways including with daily care and education.

Non-probate assets in an estate plan

New York residents who are creating an estate plan should be aware that non-probate assets are not passed to beneficiaries under a will. That means that whoever is on the beneficiary designation or whoever shares the asset inherits the asset regardless of what is written in the will.

Examples of non-probate assets are those that are passed down using beneficiary designations, such as retirement accounts and life accounts. Real property in which people share rights of survivorship is another example. Certificates of deposit or bank accounts might have beneficiaries named to whom the accounts are payable upon the owner's death.

Planning for asset distribution after death in New York

When planning for the future of their assets, estate holders may want to consider speaking with their heirs. Speaking with children will allow the estate holder to get a feel for how their assets may be spent and managed. In addition, it will help them figure out the best way to leave property to beneficiaries.

Many people opt to leave assets to people through a will. While there is nothing wrong with this, it severely limits how property can be passed on and managed. As soon as the estate holder passes away, assets listed in their will are immediately distributed to heirs.

Understanding the basics of a trust

While New York residents may believe that they need a trust, this may not always be the case. Furthermore, those who want to create a trust need to choose the one that best suits their needs. One common type of estate planning instrument is the revocable living trust. It has a trustee who carries out the instructions that the document provides as well as one or more beneficiaries.

The terms of a trust may be customized to fit the needs of the individual who creates it. For instance, parents who create a trust for their children may determine when a son or daughter gets access to their inheritance. While the parents are still alive, they would be the trustees, and a secondary trustee may be named to take over when the parents pass away. The new trustee would only be able to take money out of the trust for the benefit of the children in this scenario.

The benefits of estate plans for New York residents

President Trump campaigned on eliminating the federal estate tax entirely, and some people are wondering if they need to bother with creating an estate plan if they don't have to worry about the tax burden their heirs may face. However, the exemption in 2017 is $5.49 million per person and $10.98 million for married couples. Therefore, many people do not have to worry about federal estate taxes, but that doesn't mean that estate planning is unnecessary for those individuals.

People should still create estate plans because there is more to them than mitigating taxes. Estate planning allows people to determine how their assets will be distributed upon their death. Using trusts, people can be very specific about how they want their property doled out.

Tips on estate transfers

New York residents who have assets they want to be managed a certain way after they die should have an estate plan. An estate plan, which should at least include a will, a living trust and a power of attorney form, can ensure that one's wishes are carried out and that their loved ones and assets are protected. However, there are certain steps individuals should take to make sure that their estate plan is effective.

An individual's will should state his or her intentions clearly and correctly. The will should be reviewed after it has been completed to verify all wanted beneficiaries are mention and that each one is bequeathed the share of assets according to the intentions of the testator.

Understanding the role of estate executor

Individuals who are tapped to be the executor of a parent's estate are tasked with fulfilling his or her final wishes. Therefore, those who live in New York and elsewhere around the country may be wondering how and when they fulfill their obligations. An executor is responsible for paying the final expenses of the deceased as well as maintaining property until the estate is settled.

When someone is named the executor of a parent's estate, it is crucial that he or she communicates with mom or dad to confirm his or her wishes. This may make it easier for the family to be on the same page and prevent infighting when the parent does pass on. After his or her mother or father passes on, the executor will need to gather the will and other relevant estate documents.

Most people don't have a will

New York residents who have don't even have a basic will are in the majority. Although dying without a will can create a lot of confusion and problems for the loved ones a person leaves behind, most people don't take the time to complete the easiest estate planning step. According to a survey that was released in early February, just 42 percent of adults in the U.S. have a will or a living trust.

The younger a person is, the less likely they are to have written a will. The survey found that 78 percent of adults between the ages of 18 and 36 don't have a will, and 64 percent of adults between the ages of 37 and 52 do not. People between the ages of 53 and 71 are more likely to have wills, and just 40 percent of people in this age bracket reported that they did not have one. Though wills can be used to leave vital instructions about the guardianship of young children, only 36 percent of parents with minor children have created an estate plan.

How to help elderly relatives with their finances

With the fact that more people in New York and across the country are living longer nowadays, many of them face difficulties with daily tasks, such as paying their bills and making investment decisions. For this reason, their family members may find it necessary to step in and assist them, which can help protect their future as well.

While it may be difficult for parents to allow family members to take over their financial affairs, doing so as soon as possible will reveal a loved one's wishes regarding long-term care arrangements. Taking such action early could also reduce conflict among family members, and the need for relatives to initiate incompetency proceedings.

Tax advantage of AB trusts

New York couples who are married and may have to owe estate tax may want to take advantage of an AB trust. Although their popularity has decreased after Congress passed portability rules, they still can be useful for people who have large estates.

When a spouse dies, estate taxes will be due on the assets detailed in his or her will before they pass to the beneficiaries. To prevent this, each spouse can leave their property to an irrevocable trust. After the first spouse dies, the beneficiaries will receive the assets, but as a condition of the trust, the assets will be used to benefit the surviving spouse, who will not have any legal ownership to the assets. When the surviving spouse dies, the estate, which is not subject taxes as the surviving spouse does not own the property, will pass to the beneficiaries. Establishing an AB trust can make half of a surviving spouse's estate untaxable.