Anyone who owns property in New York can benefit from considering how they want to handle estate planning. Estate planning involves how a person wants their assets distributed upon their death as well as protection of assets during the person’s lifetime. A common mistake that many people make when planning their estate is not properly allocating estate proceeds to charity.
One important consideration for charitable contributions is how the proceeds will be affected by taxes. When the charity receives the money, it will not be required to pay taxes on the income. By allocating funds donated to charity to come from a source such as an IRA rather than the after-tax funds in an estate, beneficiaries of the estate may be able to save money on taxes.
An IRA is a separate document from a will or trust, and typically a brokerage firm or employer will have the grantor sign it. A will or trust is usually drafted by an estate planning attorney. Coordinating the two forms is important for preventing confusion when it is time for the assets in the estate to be distributed.
An estate planning attorney may be able to help clients avoid some of the common problems that arise with estate distribution. For example, trusts are one tool that can be utilized for the benefit of the owners of an estate and their beneficiaries to protect assets during the grantor’s lifetime and ensure that benefits are distributed according to the owner’s wishes.
There are many considerations for planning an estate, such as considering tax implications, determining whether assets will need to be probated and ensuring that assets will go to the persons or entity that the grantor intends for them to go. An estate planning attorney may be able to assist clients with these types of legal questions as well as the creation of other important documents such as a living will.