When an estate plan isn't put together correctly, it can lead to legal battles, tax bills and other problems for New York residents. One of the biggest mistakes that people tend to make is failing to name a beneficiary to a retirement or other account. In the event that beneficiaries are named, individuals may fail to review those designations after they are made. This can be problematic because a person's needs may change over time.
Many people do not have a will. Therefore, you experienced a well-justified sense of accomplishment when you sat down with your attorney to create yours.
The mention of trust funds may evoke thoughts of privileged children from wealthy families in the minds of New York residents, but trusts can be extremely useful estate planning tools even for those of more modest means. While the affluent do use trusts to reduce their estate tax exposure and transfer generational wealth, they are most commonly drafted to avoid probate, protect assets from creditors, prevent children from inheriting large sums of money at a young age and to ensure that heirs continue to qualify for federal benefits like Medicaid.
When New York residents neglect to draft an estate plan, they create a situation where others will be tasked with making important decisions on their behalf. Many people put off estate planning because contemplating end-of-life scenarios can be emotionally difficult, but resolving these matters can put an end to gnawing anxiety and provide peace of mind.
Despite the fact that people often know it is important to plan for the future, many adults in New York do not have wills, trusts or other estate documents in place. There are many reasons why people put off making decisions about their estates: They may not want to think about death, there may be complicated family situations to consider, or they may just think they have more time to deal with the issue later. However, in an emergency situation, people may not have the plans in place they need to help their own peace of mind as well as that of their loved ones.
There are a lot of commonly misunderstood aspects of estate planning. The spread of myths and misinformation can make it easy to talk yourself out of estate planning. You may assume you do not need to have a will or trust just because you are not at a certain income level or age. But the truth is that everyone needs an estate plan, whether your net worth is $20,000 or $20 million.
It can make sense in many cases for New York residents to use trusts, rather than other methods, to transfer wealth to younger generations. Among the advantages trusts might offer are asset protection, maintaining family control and tax planning. Dynasty trusts may be one of the most useful estate planning instruments for individuals and families who want to preserve wealth for a long time.