Because of the privacy and flexibility provided by trusts, many New Yorkers make them a central part of their estate planning strategies. By using trusts, people can help to refine their gifts to minors, create certain conditions for passing on property and give significant assets to their heirs without going through probate. Many people also hold significant amounts of money in their individual retirement accounts (IRAs). An account holder can name another person as the beneficiary of the account. Many people may name a spouse or child to receive the remaining funds in the account.
Including your vacation home in your estate plan
The vacation home can be an important piece of property for you and your family. If you want to give it to your heirs for future generations to make memories in, you should start thinking about how to include it in your estate plan. But this requires more than just creating a document if you want to prevent future family feuds.
Parents should strongly consider trusts
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.
Estate plans and chronic illness
People in New York who have a chronic illness or have a loved one who is chronically ill should have estate plans that include certain provisions that address health and aging complications. Over 130 million people in the United States are chronically ill, and by 2020, nearly 157 million will have some type of chronic disease.
Transfer on death accounts avoid probate
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.
How to avoid the New York estate tax
If you have a significant estate in New York, you may have concerns about being subject to the estate tax. According to the New York State Department of Taxation and Finance, the current estate tax limit for 2019 is $5,740,000. If the value of your estate is below this amount, you do not need to worry about having an estate tax liability.
