A recent Caring.com survey found that just over 40 percent of American adults have estate planning documents. While some New York residents may think they do not need an estate plan, such planning can be important for adults of all income levels.
One of the main reasons is to appoint people to take care of medical and financial affairs if the estate owner is incapacitated. Many do not realize that an estate plan can protect them and their assets while they are still alive. An estate owner should discuss their wishes for medical care with loved ones.
Without an estate plan, the state decides what will happen to a person’s assets after death. Even an estate owner who does not have a will should at least look over beneficiary designations for retirement, life insurance and other accounts to make sure they are current.
Wealthier people may have a number of other concerns as well. For example, there could be generation-skipping tax, gift tax and estate tax to consider, and an estate plan can be designed to minimize these taxes. An estate plan can also help a person plan for charitable donations. Wealthy estates could be the target of frivolous lawsuits, and an estate plan may help protect assets. Finally, an estate plan can be part of preparing future generations for wealth management.
An attorney could help a client create an estate plan. The plan may be particularly important if the person has children from a previous relationship. Proper planning can ensure that inheritances are distributed according to wishes.