Syracuse Elder Law Blog

Wills can be effective estate planning tools for those who have few assets or don't have children. However, once a person becomes a parent, it can be a good idea to create a trust. The primary benefit is that it prevents a child from directly inheriting money when he or she turns 18. Instead, the assets inside of the trust will be managed by another person or entity.

While it is possible for a person in his or her 20s to manage money properly, this isn't always the case. There are plenty of stories of people who purchased houses, took vacations or spent lavishly on other items until the money was gone. A trustee can teach the child how to be fiscally literate and how to generate an income that lasts for many years or decades to come. At a minimum, a trust will provide boundaries that children and younger adults need.

A comprehensive estate plan in New York might contain any number of specially-drafted instruments, including a will, trusts or powers of attorney. One planning tool that might help keep your heirs out of probate court is a transfer on death account. TOD accounts transfer assets automatically to a beneficiary who is named by the account holder. If a person had a TOD savings account with $50,000 in it and named his or her child as the beneficiary, the funds would transfer automatically to the child when the person dies.

TOD accounts might be established via a brokerage account with a provision that directs the assets to a named beneficiary on the death of the account holder. It is possible, and desirable, in many cases to name more than one beneficiary on a particular account. Parents could establish a TOD account with all three of their children named as beneficiaries, each to get a third of the account.

People in New York who are preparing an estate plan might want to consider creating a financial durable power of attorney. This would appoint a family member to take action on a person's behalf if the person becomes incapacitated. Without this document, even a spouse could be prevented from taking care of the person's finances. This would include dealing with things that need a signature from both spouses.

If a person does not have a durable power of attorney, it may be necessary for a family member to go to court and petition for guardianship, a process that can be expensive and time-consuming. If the person simply has a power of attorney but not one that is durable, its authorization could end when the person becomes incapacitated. There is also a document known as a "springing power of attorney" that takes effect when a person becomes incapacitated. However, a springing power of attorney can require a physician's certification of incapacity, so there could be a delay before it comes into effect.

One purpose of New York estate plans is to minimize the likelihood and duration of estate disputes that may arise upon your death. Though you may leave behind detailed instructions that have considerations for all your loved ones’ potential concerns and needs, there is still the possibility of someone not agreeing with your final decisions. One solution that can help nip potential disputes in the bud is a no contest clause. 

It is important to understand that disputes can still arise between your beneficiaries. A no-contest clause does not automatically bar a disgruntled relative from filing a dispute. There are circumstances where a probate court may decide to allow a contest petition to proceed. Here are a few considerations about the no-contest provision for estate plans.