There was a time when someone in New York with significant assets that they wanted to pass along to their children in a controlled manner would likely be advised to set up an irrevocable trust. The problem is that such trusts are close to impossible to amend. This can present further issues for trust holders with adult children who not quite ready to responsibly handle regular disbursements.
It's not necessary for anyone in New York weighing their estate-related options to have substantial assets to benefit from this type of proactive planning. Yet, according to the American Association of Retired Persons (AARP), more than half of all adults and millennials do not have basic documents like a will or living trust.
Wealthy art collectors in New York are usually very passionate about their art, and art aficionados who can afford to amass impressive collections aren't too concerned about disposing of any of their prized possessions. This usually means that when an affluent art enthusiast passes away, they have a sizable stash of valuable works of art. Unfortunately, another thing that wealthy art collectors have in common is a lack of proper estate planning.
The end of the holiday season and transition into a new year is an ideal time to prepare an estate plan. New York residents should start by inventorying their assets both large and small. It is critical that a person doesn't forget to leave behind a list of online passwords or other instructions related to digital assets. It is also important to have a conversation with other family members to articulate that plan once it is made.
Those who are turning 55 in the near future may still be trying to find solutions to both current and long-term financial issues. However, New Yorkers who are attempting to create an estate plan may want to make a life insurance policy a part of that plan. Perhaps the most important benefit of a life insurance policy is that it can provide cash at the time of a person's death.
A power of attorney is one of the most useful and versatile estate planning tools available to New York residents. The document will appoint an agent, or attorney-in-fact, to act in the place of the principal with limited or broad powers. If it's a durable power of attorney, the powers will continue if the principal becomes disabled.
New York residents in the process of estate planning should remember three common pitfalls that may cause problems for their plans. In summary, these issues are a lack of information, beneficiary designations gone wrong and outdated plans. These snags can unravel estate plans and cause family feuds that may go all the way to court.
New York fans of comic book artist Stan Lee may know that he ran into some issues with his finances and his associates before his death. For example, earlier this year, he said that $1.4 million went missing from his account. In a dispute with his daughter, he signed a notarized document claiming she befriended men who wanted to take advantage of him among other accusations and then took it back. Furthermore, he has worked with several managers and attorneys throughout his career.
For New York residents and others, creating an estate plan is an ongoing event. After the paperwork has been drafted and executed, there are many tasks that still need to be completed. For instance, it may be necessary to make sure that a trust is properly funded and that the trust owns the items placed inside of it.
New York residents may use estate planning as a way to help prevent their estates from being overly taxed. However, with the passage of certain federal estate tax legislation, which has increased the number of exemptions for estate, federal, gift and GST taxes, people may want to take the time to consider other reasons why estate planning can be a good idea.