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Syracuse Elder Law Blog

Knowing about will contests can help you avoid them

If you are like many New York adult children who are helping their parents with estate planning issues as they age, you likely have talked to them about making their Last Wills and Testaments. If they have not yet done so, however, it will be helpful for you to know about New York will contests so you can help your parents avoid one.

To begin with, only certain people can challenge a will, including the following:

  • Anyone named in it
  • A close relative who the will does not name
  • Anyone named in a will that your parent executed prior to or subsequent to the will being challenged
  • Anyone who would inherit by intestacy if your parent had died without making a will 

Remember health care in estate planning

New York residents who are planning for retirement are generally focused on income streams, managing risk, minimizing tax implications and Social Security. A key aspect of planning for retirement is the inclusion of health care planning. Many financial planners fail to make it a focus in their conversations with prospective clients, but that could be doing them a disservice.

A major health crisis can render even the ideal investment and wealth protection plan insufficient. Recent estimates indicate that the average American couple will be required to pay $260,000 for out-of-pocket health care expenses during retirement. Long-term care, which is not included in that figure, is not covered by Medicare, and assisted living can run several thousand dollars a month in a modest facility. Either way, a hard look needs to be given at the prospect of health care creating a drain on assets during one's golden years.

How the higher estate tax exemption may affect planning

Although the tax bill signed into law by President Trump in 2017 increased the estate tax exemption to over $11 million for individuals and more than $22 million for married couples, New York residents might still want to keep other taxes in mind when creating an estate plan. There are strategies people can follow to reduce both transfer and income taxes.

Assets that produce high income can be placed in a trust that pays a beneficiary in a lower tax bracket. Contributing more to charity may help in some situations. There may be a number of other strategies available as well.

3 costly estate planning mistakes to avoid

Planning for the inevitable is not a very pleasant thing to think about. But if you fail to prepare for when your time will be up, your assets may not pass on to your heirs how you want them to. Not only can estate planning maximize the value of your estate, but it gives you the opportunity to make decisions about what will happen to your assets. 

If you fail to implement or update your estate plan, your beneficiaries may lose out on what you want them to get. If you want your estate to be as valuable as possible, here are some common estate planning errors to avoid.

Estate planning can save time, energy and assets

Estate planning can be an emotional task for people in New York as it involves dealing with emotional and complex issues about the end of life and relationships with one's heirs. However, it can also be critically important to ensuring a smooth transition and protecting the assets one has worked so hard to develop over the years.

A person's estate includes all of the property that a deceased person owned; it can include both their assets and their debts. The net assets of the estate are available for distribution after settling remaining liabilities. The standard process for dealing with an estate is called probate, and this legal procedure transfers the title of these assets from the estate to the heirs of the decedent. Probate, however, can be a costly, slow process and consume a great deal of the assets remaining in the estate. This means that avoiding and minimizing probate can be important for people who want their heirs to benefit from the estate, not for its value to be lost in lengthy court procedures.

Estate planning essentials

While many people in New York intellectually understand the importance of estate planning, many fail to take action. As a result, many New Yorkers lack even basic documents that indicate what they want to happen to themselves and their assets after they die or become incapacitated.

There are several reasons why people shy away from estate planning. Many are uncomfortable discussing death or even thinking about it. For this reason, reasonably healthy and young people may be more comfortable putting off writing a will for as long as possible. Another reason for not addressing end-of-life issues is that an individual or couple may mistakenly think that they don't have enough assets to justify an estate plan.

Debunking 4 myths about wills

People need to keep close eyes on their wills throughout the years. Financial abuse related to wills has become increasingly common, and adults need to ensure they update their wills periodically even if no major life changes have occurred. 

It is important to review a will often, preferably with an attorney by your side. Many people end up making mistakes that end in disasters when it comes time to divide assets. Make sure you separate fact from fiction and talk to your parents about these myths so that they know what to correct themselves. 

Bitcoins can be part of an estate plan

New Yorkers who are invested in bitcoins and other cryptocurrencies may be concerned about the future of their investments after their death. Because these are relatively new developments, many investors have not yet accounted for them explicitly in their estate planning documents. Yet digital assets, from personal profiles on social media sites to online accounts in cryptocurrencies, can be some of the most important ones a person owns.

The nature of bitcoins can make them a particular concern to deal with after death. Their very security, encryption and virtuality makes them a more difficult subject of transferred ownership rights than other traditional investments. Bitcoin owners have a key, a private password, that allows them to access a secure digital wallet. No central authority retains these keys, and the only way to have access is to obtain the key directly from the wallet holder.

How the tax law may affect some estate plans

Since tax reform passed in December, some people in New York might want to revise their estate plans to reflect the change in estate tax. While this is a change that will only affect very wealthy people, even those who do not need to worry about estate tax may want to review their plans. It is a good idea to look over a plan periodically and make sure it is still consistent with a person's goals, assets and relationships.

There is no longer any estate tax on estates worth less than $11.2 million, and the threshold for married couples is $22.4 million. People whose estates were previously subject to estate tax might have designed their estates to reduce or avoid this tax, so they may want to change those plans. Married people may want to make sure their estate plans have the right language to ensure portability.

Wills and the probate process

In many cases, a probate is essential to a will. The probate is the process that orchestrates the fulfillment of a testator's wishes for the distribution of assets.

If you are the beneficiary of a will, it is important that you understand the probate process. There are a few key elements to become familiar with.