A will is the cornerstone of most estate plans. It is a document that outlines where assets go after an individual passes away. It may also name a legal guardian for a minor child. Trusts name a trustee and are used to hold assets on behalf of beneficiaries. There are several factors that may determine whether an individual needs a trust.
Due to the way that applicable laws change, over time the details of a will can be outpaced by the current legal environment. This is especially true when looking at a will through the lens of current tax laws. The goal of anyone who is writing a will should the to transfer as much value from an estate to the next generation, and it's important to think about how new laws can leave the terms of will too dated to serve their expected function.
New York residents will likely remember Dean Smith for his incredible coaching career that spanned 36 years and included two national championships with the North Carolina Tar Heels. However, recent disclosures indicate that Smith's was also astute in the area of estate planning. Smith bequeathed $200 to approximately 180 of his former players, but it is not his generosity that has drawn praise.
Although some New York couples may equally share in the financial management of a household, in many cases, one partner tends to take primary responsibility for such matters. This can be a challenge with regard to estate planning due to the fact that a disconnected spouse might struggle in taking over such issues after a partner's death. However, a spouse who is aware of the challenges that a partner would face in knowing what to do after their death can enlist the help of an estate planning professional to minimize the difficulties of that transition.
Many couples create estate plans together as a way to ease the process should anything happen to either person. This estate plan can be the last thing on their minds as they go through this process. A divorce in New York automatically cuts the former spouse out of the will, but it does not affect other beneficiaries. This can lead to benefits and assets going to the former spouse's relatives instead of alternative beneficiaries.
It is not uncommon for some New York residents who are planning their estates to forget to think about their life insurance policies. For some people, however, these policies, if included in their overall estate valuation, could subject the estate to significant estate tax liability.
Many New York residents have already taken the essential step of creating an estate plan. It is an important process for protecting assets and distributing them to heirs. However, estate plans can be in place for years if not decades. To keep them relevant, plans may benefit from review at regular intervals.
When people are in the process of how to handle their assets during their lifetimes and after they die, many may benefit from considering setting up a trust. Trusts can be valuable tools to use in estate planning, as they have a number of benefits.
Many New York Residents may be interested in securing their financial legacy. It is important to understand that this security may be achieved through a combined plan that may include a will and a trust.
Some people think that estate planning is complex and will cause family disputes while others simply do not want to think about asset distribution. Unfortunately, too many New York residents die without wills, a health proxy or power of attorney in place. The National Association of Estate Planners and Councils explains that it is important to have a living will and trusts in place not only to preserve assets but also to make estate administration and asset distribution easier on the family.