At one time, estate planning consisted of merely a last will and testament. For the very wealthy, it might have consisted of a trust. In modern times, estate planning can and should be much more than just preparing a will. New York residents should consider some of the options available.
New York residents can include provisions in their estate plan that allow part of their estate to be given to their favorite charities. Changes in federal laws regarding gift and estate taxes are likely to impact the manner in which charity is integrated into an individual's estate plan.
New York residents and others may have qualms about leaving assets outright to a minor child. However, it may also be a good idea to leave assets meant for adult children in a trust. The primary reason to leave assets in a trust is that advanced age doesn't necessarily translate into advanced financial skill. As the value of an inheritance increases, it is critical that whoever oversees it has the type of financial skills necessary to manage it properly.
One of the major mistakes New York residents can make when devising their estate plans is not using a strategy that allows assets to bypass the probate process. Probate, which can be costly and slow, is a legal process through which assets must pass if they are transferred to beneficiaries via a will.
People in New York should consider an estate plan with the appropriate legal documents in place so that any financial or healthcare decisions made on their behalf are done according to their preferences. Having an estate plan is not only about planning for assets but also accounting for if an individual is incapacitated and unable to make decisions on their own.
New York residents may find that they are best served by creating an estate plan as soon as possible. One man almost had to pursue guardianship of his father after not understanding how a power of attorney worked. The man thought that he could create and sign the document on his own. However, for the POA to be valid, the father would have to sign it.
New York residents may be able to use a domestic asset protection trust as part of their estate plan. One of the most common reasons such a trust is used is to protect assets from creditors. However, state law may allow for the transfer of assets to such a trust to be voided. In many cases, this applies to existing creditors whether they are known or not.
Estate planning can be used by people in New York to protect their assets for future generations. However, there are some common estate planning mistakes they should take care to avoid.
When many New York residents think about bequeathing their estate to their family members, they may be mostly thinking about the assets that they spent a lifetime working towards. However, many residents also wish to leave behind their knowledge. While this can be difficult, some may have the ability to do through certain assets, such as a company or a work of art. In order for these types of assets to continue to live past death, people should consider legacy planning.
New York residents may have heard the term legacy planning used interchangeably with estate planning. While similar, a legacy plan is more about taking steps to craft a reputation as opposed to merely transferring assets. It is generally seen as being proactive about establishing an estate plan as opposed to being reactive. One misconception about legacy planning is that it is egotistical to create one.