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.
It is generally not a good idea to sell land or other assets for less than their fair market value. This is because the IRS will characterize the transfer as a gift as opposed to a sale. Furthermore, the person who receives the property will not be able to obtain a step-up in cost basis. Therefore, the recipient may miss out on an opportunity to minimize capital gains taxes if that asset is sold again in the future.
Parents and grandparents should never leave assets directly to a minor as they cannot manage money or other items on their own. It is also important to define how a custodian can use an asset to benefit the child. Otherwise, there is a chance that this person could take steps to benefit him or herself as opposed to the child.
The loss of a loved one can be a stressful situation even when an estate plan has been created properly. Individuals may want to review their plans with an attorney on a regular basis. This could mean scheduling an annual appointment or reviewing documents after a major event such as a birth or death in the family. If necessary, a estate planning attorney may help to create new documents or alter those that need to be changed for any reason.