Estate Planning for Dummies: Everything You Need to Know

Estate planning might seem overwhelming, but it’s a crucial step in securing a future for the people you care about most. While it’s not easy to face the reality of what happens when we’re gone, setting up an estate plan is one of the most impactful decisions you can make. Every day, lives are affected by sudden loss, and without a plan, families are often left struggling to piece together what their loved ones would have wanted. That’s where estate planning comes in—it’s your way of ensuring that your assets are protected, your wishes are respected, and your loved ones are supported.

At New York Legacy Lawyers, our experienced New York estate planning attorneys are here to simplify this process, guiding you through the essential steps such as drafting a will, setting up trusts, and establishing powers of attorney. We’ve created this guide to break down complex concepts into easy-to-follow steps, allowing you to feel confident in taking the first step toward securing your legacy. Contact us today at (718) 713-8080 to avoid common estate planning mistakes and begin the journey toward a stable future for your loved ones.

Estate Plans For Dummies: What You Should Know About Estate Planning

Estate plans should be a top priority as they cover many areas of your life, including personal wishes, healthcare desires, financial matters, and even self-advocacy. Most people are familiar with at least one idea of estate planning. Often the document people tend to start with is a Last Will & Testament.

In your last will, your goal is to identify tangible and intangible assets and to describe what you want to happen with them, clearly. Beyond assets, your last will provide a platform for you to share thoughts and even embed other parts of your estate plan, such as a trust.

Tips For Writing Your Will

When you sit down to write your will, you might want to identify to the best of your ability, the answers to these questions.

1. What properties do you own?
2. Will you need a guardianship plan for your children?
3. Who will be your beneficiary?
4. Who should get ownership of pets?
5. Who is your executor?
6. Have you considered a trust?
7. Do you trust anyone else to make financial decisions for you?
8. Do you trust anyone else to make healthcare decisions for you?
9. How much will your estate pay in taxes after you die?
10. Is there anyone you DON’T want inheriting any part of your estate?

These questions are only the starting point. Many situations could make your last will difficult to draft on your own.

Clarifying Final Wishes

While answering the questions, think about who will be there to interpret the answers you’re pondering. Will it be your eldest child? A grandchild? Your spouse? Try to frame your answers in ways that would make sense to them. This person, or these people, will be the executor of your decisions.

Your executor will be responsible for ensuring the beneficiaries of your will receive what you want them to.

Trusts for Dummies

A trust is a legally binding document that enables an individual or organization to oversee and hold your finances and assets for your own benefit or for the benefit of others. It serves multiple functions, including estate planning, tax planning, medical planning, and charitable giving.

In contrast to a will, which takes effect after death, a trust has the ability to manage and invest your assets both during your lifetime and after your passing. Furthermore, it bypasses the probate procedure, which can be lengthy, costly, and exposed to the public. The individual who creates the trust is referred to as the “grantor” or “trustor,” while the person entrusted with managing the assets is known as the “trustee.” The recipient of the assets is called the “beneficiary,” and the assets held within the trust are known as “trust assets.”

Various types of trusts exist, including living trusts and testamentary trusts. A living trust remains active during your lifetime and may continue to operate after your death, providing ongoing management and distribution of assets. On the other hand, a testamentary trust is established through your will and only takes effect following your death. There are also specific types of trusts designed for particular situations, such as supplemental needs trusts and spendthrift trusts. Supplemental needs trusts enable you to allocate funds for individuals with disabilities while ensuring their eligibility for government assistance is maintained. Spendthrift trusts, on the other hand, restrict access to funds for individuals who struggle with managing their finances or have multiple creditors. You have the option to create both of these trusts either as living trusts or testamentary trusts.

Maximize the protection and preservation of your assets for future generations with the assistance of a New York estate planning attorney. At New York Legacy Lawyers, our skilled attorneys have knowledge of trust law and can guide you through the complexities of establishing and managing trusts, allowing you to secure your legacy and provide for your loved ones. Contact us today to schedule a consultation and take the first step towards a secure future.

Family Trusts For Dummies

Trusts serve multiple purposes, such as managing estate taxes, safeguarding assets from creditors, and passing down wealth to future generations. Among the various trust types, the family trust stands out as a distinctive vehicle that enables families to establish a lasting financial legacy. Creating a family trust offers numerous advantages, including the assurance that your family members will inherit your wealth and the avoidance of public disclosure of trust assets.

Typically, a family trust involves three essential roles: the grantor, the trustee, and the beneficiaries. The grantor initiates the trust by transferring their assets into it. The trustee then takes on the responsibility of overseeing and managing the trust’s assets, acting on behalf of the beneficiaries. These beneficiaries are specifically identified individuals entitled to receive financial benefits from the trust.

A family trust designates your family members as the primary beneficiaries, extending eligibility to children, grandchildren, siblings, aunts, uncles, cousins, and other relatives. Moreover, spouses can also be included as beneficiaries in family trusts.

Family trusts fall under the category of living trusts, offering the flexibility of being either revocable or irrevocable, depending on your specific preferences. A living trust comes into effect while you are alive. A revocable trust allows for modifications or revocation at any point; you can act as your own trustee and appoint successors in the event of incapacitation or death. In contrast, an irrevocable trust necessitates the appointment of another individual as the trustee, and its terms are permanent.

Secure your family’s financial future with a family trust. At New York Legacy Lawyers, our skilled New York estate planning attorneys can help in crafting personalized family trusts tailored to your unique needs. We can guide you through the intricacies of estate planning, providing clarity, and protection for generations to come. Contact us to schedule a consultation and take the first step in safeguarding your family’s legacy.

Wills and Trusts for Dummies

Wills and trusts are both legal tools for passing on your possessions when you’re no longer around, and both may be adjusted or withdrawn while you’re alive. The main difference between the two lies in how they transfer property to the people you’ve chosen to receive it.

A will, or Last Will and Testament, is a written statement where you name an executor who will manage the division of your possessions after you’re gone. A will can also be used to choose a guardian for your underage children and can contain details about your funeral or memorial service, such as whether you prefer burial or the spreading of ashes.

A trust, meanwhile, is a legal document that forms a fiduciary relationship between your assets and a selected person or organization. This selected party, called the trustee, has the power to manage your assets for the benefit of your chosen recipients. Trusts are classified into irrevocable trusts, which can’t be changed once they’re set up, and revocable (living) trusts, which you can alter anytime you want.

After you’ve written a will, you might want to think about adding a trust to your estate plan if:

• You Want to Avoid Probate: Wills require going through the probate court process to be legally enforced. Any property given through a will must go through probate, which involves assessment, inventory, and court-approved distribution before the people you’ve chosen can receive their inheritances. In contrast, any assets in a trust don’t have to go through probate, which can make the inheritance process quicker and less expensive.
• You Value Privacy: The probate process for wills is public, which means the details of your estate are made public record. Trusts, on the other hand, are private documents that can’t be accessed by anyone not involved.
• You Have a Large Estate: If you have a lot of assets, valuable possessions, or a successful business, you might need a trust to reduce your tax liabilities. Both living and irrevocable trusts take effect as soon as they’re set up, meaning they can be used right away for tax purposes.
• You Want to Reduce Legal Costs: A well-organized trust can significantly lower the chance of legal disputes after you’re gone. Trusts are legally binding and hard to challenge, which means your heirs are more likely to respect your wishes, reducing the need for court action.
• You Have Specific Beneficiary Needs: If you have underage children, are worried about the financial responsibility of your chosen recipients, or have a lot of people you want to leave things to, trusts offer more control over distribution. For example, you could arrange for inheritances to be given out gradually to prevent irresponsible spending, instead of releasing all the money at once.

Choosing Power Of Attorney

Avoiding Estate Planning Blunders: Tips For Success

Here’s a guide to assist you in writing your estate plan and avoiding common mistakes. Listed below are some frequently occurring estate planning mistakes that you might want to avoid.

• Procrastinating on Estate Planning: Many individuals often procrastinate on estate planning. However, it’s important to remember that unexpected events can occur at any time. This is why it’s crucial for everyone over 18 to have essential estate planning documents in place. Delaying your estate plan can jeopardize the financial future of your estate, your legacy, and your loved ones.
• Not Exploring Your Estate Planning Options. While a will is essential, other estate planning tools may be more suitable for your circumstances. Failing to explore these options can lead to potential pitfalls. Consulting an estate planning attorney can support the creation of a comprehensive plan that meets individual goals and needs.
• Relying on a DIY Estate Plan. While DIY estate planning options may seem convenient, they often lead to costly oversights that a qualified estate planning attorney can help you avoid. Meeting with a trusted estate planning attorney can help ensure your plan truly reflects your wishes, giving you the confidence to return with questions or updates as your life evolves.
• Failing To Designate a Power of Attorney or Health Care Proxy. Appointing a power of attorney or a health care proxy is crucial since they will act on your behalf if you are unable to make decisions due to incapacitation. These roles typically expire upon your passing, so it’s essential to ensure they are in place while you have the capacity to decide.
• Wrong Choice of Agent/Trustee. Choosing the right agent or trustee can be challenging, as it involves careful consideration of various factors. Family dynamics are crucial in this decision, making it important to have an open discussion with your estate planning attorney. While financial sophistication is valuable, the most important qualities to look for are honesty, trustworthiness, common sense, and the ability to seek and follow guidance from reliable professionals.
• Naming One Beneficiary. It is important to name multiple beneficiaries for your assets in your estate plan. It is recommended to list multiple beneficiaries to guarantee the distribution of your assets.
• Failing to Communicate with Family and Friends. While there may be situations where discussing your estate plan with loved ones isn’t possible, it’s generally a good idea to have at least a brief conversation with them. This can help establish clear expectations and reduce the chance of disagreements or conflicts among your beneficiaries after you pass away. If discussing your plan isn’t an option, consider including terms in your estate documents specifying that anyone who contests the plan may be excluded.
• Failing to Consider Your Children’s Futures. When creating an estate plan, it is essential to carefully consider how you intend to allocate your assets among your heirs. This is especially important if your children are still young, as the wording of your directives can significantly impact their future. You may want to provide specific instructions on how your guardians should use the assets to benefit your children or care for them in other ways.
• Overlooking Tax Obligations. It is crucial to consider tax liability when creating an estate plan. Estate taxes can significantly reduce what your beneficiaries receive. You should also think about how gifts to individual heirs may impact their taxes.
• Forgetting to Include Digital Assets. Creating a digital estate plan is essential in today’s digital age, as overlooking digital assets can lead to lost information, access delays, identity theft, and distribution issues. A thorough plan allows you to specify how you want these assets managed, designate a trusted executor, and ensure legal documentation authorizes access to online accounts, safeguarding your wishes and protecting your legacy.
• Disregarding the Need for Preparing Final Arrangements. It’s important to plan ahead for your final arrangements to make things easier for your loved ones during a difficult time. This includes deciding on your funeral or burial arrangements and communicating your wishes for end-of-life care, such as hospice or assisted living.
• Failing to Safeguard Your Estate Plans. It’s important to secure your estate plan so that your heirs can access it when needed. Consider storing it in a secure but accessible location instead of a safety deposit box. Keep all of your estate planning documents together in a safe place to ensure your heirs can find them easily.
• Failing to Keep Your Estate Plan Current. Regularly reviewing and revising your estate plan is crucial. Life changes such as marriage, divorce, and the birth or death of a family member can impact your plan, and it’s important to make necessary updates to avoid complications later on.

Make A Plan That Works

We hope that in reading our Estate Planning for Dummies, you’ve got a list of questions longer than the ten we gave you in the article. If so, that’s great! We are here to help you figure out those answers.

At New York Legacy Lawyers, our New York estate planning lawyers understand how personal, and unique each estate plan needs to be. We know how intimidating the planning process can be when you’re facing it alone. It’s our mission to relieve any stress you may have about the planning process.

Reach out to us today using our contact us page or call us at (718) 713-8080, and let us tell you how we can help.