Here’s What You Should Know About a Trust & How to Set One Up

Without proper planning for the transfer of your assets before your death or incapacitation, you relinquish control over who inherits your estate, potentially causing your loved ones to bear the financial burden.

Fortunately, there are several strategies to prevent this all-too-common scenario, and one vital component of a well-rounded estate plan is setting up a trust.

In this article, we delve into essential information about trusts and offer guidance on incorporating them into your estate planning. Don’t miss the opportunity to take control of your assets and secure your loved ones’ future – consult with a skilled Brooklyn trust planning lawyer for tailored advice on crafting a trust that suits your unique circumstances. Call the New York Legacy Lawyers today at (718) 713-8080 to schedule a consultation.

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A Quick Primer on Trusts

Trusts are a tremendous tool you can use in addition to your Last Will & Testament.  Fundamentally, a trust is an estate planning tool which helps to manage the distribution of your property by transferring your estate into a separate entity and then to your beneficiaries (which may include yourself) when certain pre-defined conditions have been met.

Reasons to Create a Trust

A Trust is set up to protect and manage a family’s assets for the benefit of both current and future generations. There are many reasons to create a trust some of which include

• Creditor protection: Property which is managed by a trust is no longer owned by the settlor or the beneficiaries, so it cannot be claimed by future creditors. This gives the settlor an opportunity to venture into higher risks without risking the trust assets.
• Relationship Property Claims Protection: Relationship property laws permit the partners of your children to have access to the property that you gifted them during your lifetime, in case their relationship comes to an end. Placing these properties in a Trust, instead of under your children’s names will ensure that your children continue to benefit without these assets being part of their personal property.
• Protecting Family Members with Special Needs: A family trust is ideal if you want to protect children or family members with special needs or those who require medical care. You can make provisions in the trust to protect these people against other family members who may want to control the family assets for themselves in the event of your death.

There certainly are more reasons to establish a trust.  Connect with us to see if your individual situation can be or should be addressed via trust establishment.

Reason for creating a trust	Benefits of creating a trust
Creditor protection	Assets managed by the trust are protected from future creditors
Relationship Property Claims Protection	Protects the assets from the partners of your children in the event of a relationship breakdown
Protecting Family Members with Special Needs	Protects family members with special needs from other family members who may want to control the assets

Establishing a trust

The basics of creating a trust require the settlor, who is the property owner, to transfer legal ownership of the property to the trustee, who can be an individual or an institution (including the settlor). The trustee then manages the property for the benefit of the beneficiary.  A fiduciary relationship is created by the trust, running from the trustee to the beneficiary. Therefore, the trustee must work for the best interest of the recipient when managing the trust property.

In some cases, the settlor may act as the trustee and retain the ownership of property instead of transferring it, in which case, they must act in a fiduciary capacity. The settlor is also allowed to name themselves as one of the beneficiaries of a trust.

Can You Set Up A Trust Without An Attorney?

When individuals encounter the concept of a trust, they often imagine a complex and intimidating legal paperwork. However, a trust fundamentally represents an arrangement in which an individual, referred to as the grantor, entrusts another person with the authority to manage specific assets on behalf of someone else’s benefit. The complexity of a trust can vary depending on the specific circumstances involved.

While it is possible for individuals without legal experience to create a trust on their own, it may not always be the most practical choice. It is important to note that trusts can become intricate, and legal regulations may change over time. Consulting with a qualified attorney can assist individuals in navigating potential challenges and ensure that their trust achieves their goals.

There are multiple situations where seeking the guidance of an attorney is highly recommended. If your net worth is approaching the estate tax exemption threshold, engaging in estate tax planning can offer substantial advantages for the beneficiaries of your estate. Additionally, if you have a child with special needs, prefer a non-standard distribution method for your estate, or need assistance with financing the trust, it is recommended to work closely with an attorney to establish a trust.

Even for less complicated matters, working with an estate planning attorney can provide the assurance of a professionally crafted estate plan and be a valuable resource for addressing any questions you may have. At New York Legacy Lawyers, our Brooklyn trust planning lawyers have the experience to help individuals and families establish trusts that meet their unique needs and goals. We can guide you through the intricacies of trust creation, ensuring that your assets are protected and your wishes are carried out seamlessly. Contact us today to schedule a consultation and take the first step towards peace of mind and comprehensive trust planning assistance.

How Long Can a Trust Remain Open After Death

A trust can remain open for varying durations after the death of the grantor, depending on the trust’s purpose, type, and the beneficiaries involved. The time frame for a trust to remain open can range from a year to several decades, or even for the lifetime of a beneficiary.

Trusts often stay open for extended periods when beneficiaries are minors. In such cases, the trustee may be tasked with distributing funds carefully and periodically, ensuring the beneficiary receives the money and property when they reach adulthood.

Certain trusts, such as qualified perpetual trusts or dynasty trusts, are designed to continue beyond a year and can last for several decades. These trusts are often established to preserve family wealth across multiple generations.

Special needs trusts cater to beneficiaries with disabilities, providing financial support throughout their lives, far longer than the 21-year rule applied to some trusts. These trusts can remain open for the beneficiary’s lifetime or until funds are depleted. 

Trusts can end sooner than the time frames mentioned above, often dissolving shortly after the grantor’s death. Once the assets and property within the trust have been distributed to the beneficiaries, the trust is terminated after signing a trust dissolution form.

In some cases, it is in the beneficiaries’ best interest for an irrevocable trust to end relatively quickly, such as within a year. This can avoid annual accountings and trustee fees that may reduce the trust’s assets. Additionally, a trust that remains open for too long may create opportunities for disputes among beneficiaries, potentially leading to legal action against the trustee.

Next Steps

Trusts are a great way to safeguard your estate for the benefit of your loved ones.  However, there are several more parts of a fully developed estate plan.  If you’re serious about getting your assets and estate in order, including setting up a trust, then you should speak to an estate lawyer.

We provide assistance with estate plans, including establishing trusts, for clients in Brooklyn, NY.  Please contact us today!

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What You Need to Know About a Durable Power of Attorney in New York

You may have heard the phrase durable power of attorney.

The critical aspect of a durable power of attorney is its enduring nature. Regardless of the type of power of attorney, the term “durable” indicates that the POA remains valid even if the individual it concerns becomes incapacitated.

In this article, we will explore the implications of a durable power of attorney on the financial and healthcare responsibilities of the person requiring a POA. Don’t hesitate to consult an experienced New York estate planning attorney to help you navigate the complexities of setting up a durable power of attorney tailored to your unique needs. Call the New York Legacy Lawyers today at (718) 713-8080 to schedule a consultation.

Financial Power of Attorney

A financial power of attorney names someone to oversee your finances.  Often this instrument is used if you become incapacitated or are unable to be present to take care of a financial matter.  A lot of the time travelers, service members, students, and people in similar situations will establish a financial power of attorney to enable a trusted person to take care of business when they cannot be around.

On this point, the person you choose to have power of attorney over your finances should be someone you trust to not steal from you or let your financial obligations fail for some reason.  In short, someone very trustworthy! 

Lastly on this point, naming a financial power of attorney does not mean that you do not have control over your finances – this need not be a permanent arrangement. You can always revoke a power of attorney!

A durable power of attorney has similar obligations but stays in effect (or can be setup to go into effect) when you become unable to make your own decisions due to incapacity.  IMPORTANT – if your power of attorney isn’t durable, it wouldn’t be able to help you when you need it most – if you become unable to take care of your own affairs

Some people request a SPRINGING durable power of attorney, which would only go into effect upon certain conditions being met. Usually, it is something like two physicians state that you are incapacitated.

A durable power of attorney ends when you die, or on the date you choose. 

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Healthcare Power of Attorney

A healthcare power of attorney is called a Healthcare Proxy in New York State. It names someone to make healthcare decision for you if you become incapacitated.  When choosing someone, you want to be sure that they are aware of what decisions you would make for yourself if you are able. That person should also live near enough that they can get to the hospital quickly when the time comes for them to make medical decisions for you, or at least be easily reached by phone.   A few decisions you want to discuss with your healthcare proxy are:

• Life support measures
• CPR
• Antibiotics
• Do not resuscitate orders

In New York, a healthcare proxy only goes into effect when you are unable to make your own decisions.  And you can change it or revoke it at any time.

	Financial Power of Attorney	Healthcare Power of Attorney
Purpose	Manage finances when unable to do so	Make healthcare decisions when unable to do so
Trigger	Incapacity or absence	Incapacity
Trustee	Someone trustworthy	Someone aware of your wishes and able to act on your behalf
Duration	Can be revoked	Can be revoked
Durability	Durable or springing	Durable
Termination	Upon death or date chosen	Upon death or date chosen
Scope of authority	Financial matters such as bill payments, investments, and taxes	Healthcare decisions such as life support, CPR, antibiotics, and DNR

Durable Power of Attorney Requirements in New York

According to the New York Consolidated Laws, General Obligations Law, Section 5-1501B, a financial  Power of Attorney must:

• Be typed or printed using letters which are legible or of a clear type no less than twelve point in size, or, if in writing, a reasonable equivalent thereof.
• Be signed and dated by you, when you have mental capacity.
• Be acknowledged by you before a notary public as required for a conveyance of real property.
• Be signed and dated by the person you name before a notary public.

New York has created a financial power of attorney form as well as a healthcare power of attorney form that needs to be filled out and signed by both you and the person you name. 

You do not have to use the same person for both your financial and medical power of attorney.  They can be two separate people. Further, on the financial power of attorney, you can have more than one person serving at the same time.

It is a great idea to download the healthcare proxy form and follow the directions to fill it out and have it properly witnessed. But if you are thinking about doing the same thing for the Durable Power of Attorney…

How To Sign As Power Of Attorney

When signing as an agent under a New York power of attorney agreement, it is essential to adopt a meticulous approach to effectively communicate that you are representing the principal. Some financial institutions and legal documents may require a specific signature format. Below are the steps to help you navigate the often intricate procedure of signing as a power of attorney:

Gather Your Power of Attorney Agreement and Identification

When you are signing as a power of attorney (POA), it is crucial to ensure that you have either the original or a copy of the fully completed and signed power of attorney form with you, regardless of whether you have previously provided a copy to the relevant institution, such as a bank, financial agency, or government entity. You must also bring government-issued photo identification. This ID serves to confirm your identity as the person designated in the power of attorney and to verify the authenticity of your signature.

Identifying the Preferred Signature Format

Many agencies and institutions maintain particular requirements regarding signature formats when executing tasks under a power of attorney. It is recommended to take the initiative and contact them in advance to confirm the preferred format. If there is no specific preferences, you can use a standard format like the one shown in the signature sample below:

• [Principal’s name] by [Your name] Power of attorney
• [Principal’s name] by [Your name] Attorney-in-fact
• [Principal’s name] by [Your name] POA
• [Principal’s name] by [Your name] Agent

Sign on Behalf of the Principal

Begin by signing the document in the principal’s name. This action clearly signifies that you are representing the principal and not acting in your individual capacity. Ensure you use the principal’s full legal name, replicating the format if it appears on any existing paperwork at the institution.

Affix Your Signature

Below the principal’s name, sign your own name. Include the word “by” before your name to indicate that you are signing as a POA on behalf of the principal.

Specify Your Authority as Attorney-in-Fact

Adjacent to or beneath your name, make it explicitly clear that you possess the authority to sign on behalf of the Principal. To indicate your signing authority, include “attorney-in-fact” below or adjacent to your name. Alternatively, you may utilize acceptable alternatives like “agent,” “POA,” or “power of attorney.” Neglecting to specify that you are signing on the principal’s behalf under a power of attorney could potentially make the agreement invalid, resulting in legal consequences, including civil or criminal actions.

Protect the Documentation

The last step involves securely storing each document you’ve signed in a safe location. Your role and obligations as a power of attorney for a loved one or family member can be a big responsibility, but with proper preparation, it can become a manageable task. Always comply with any specific instructions and maintain a well-organized record of the proceedings for future reference.

When it comes to understanding how to sign as power of attorney in New York, navigating the legal intricacies can be complex. However, with the guidance of a knowledgeable New York estate planning attorney, you can confidently navigate this process.  At New York Legacy Lawyers, our attorneys can provide you with legal advice and support, ensuring that you make informed decisions and execute your responsibilities as power of attorney effectively. Contact us today to schedule a consultation and secure your peace of mind in estate planning matters.

Do Spouses Automatically Have Power of Attorney?

Even if you’re married, it’s crucial to understand that spouses don’t automatically have power of attorney. Without establishing a power of attorney, you leave the door open for strangers to make critical decisions on your behalf.

Should you become incapacitated without a power of attorney in place, your spouse will face the daunting task of going to court to obtain legal authority to act for you. This process is time-consuming and expensive, causing additional stress during an already difficult period.

Marriage alone doesn’t grant your spouse the right to act on your behalf. In the absence of a power of attorney, they must apply to the Court of Protection. This court determines mental capacity, makes decisions regarding health, care, property, and finances, and appoints a deputy to act for the incapacitated person. Unfortunately, you cannot choose your own deputy, and their authority will be limited by the court’s decision.

Don’t let uncertainty define your future. Consult with an experienced estate planning attorney today to establish a power of attorney, ensuring that your interests are protected, and your decisions are made by someone you trust. Call the New York Legacy Lawyers today at (718) 713-8080 to discuss your options and secure peace of mind for you and your loved ones.

Hang on a Second Before You Download Those Forms

It is highly recommended that you use an estate planning attorney to prepare the durable power of attorney.  First of all, it is very easy to make a mistake – New York law drastically limits the authority that is granted under the basic power of attorney form. To give your agent the ability to create trusts, transfer assets, change beneficiaries, make gifts, etc. – all the things that you may actually need them to do if you become incapacitated, the basic form must be heavily modified and you need to add a special Rider.  We’ve seen lots of cases where a huge amount of time, stress, and money were lost because an inexperienced person forgot a few words or to “Initial Here” in one spot. Moreover, there are other things you need to consider when planning for your financial and health future.  Namely, a Last Will & Testament, a trust, estate taxes, and a couple of other things we’d love to tell you about.

If you are ready to set up a durable power of attorney of any type, please contact us today! Get the support you need from our New York legacy lawyers.

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Q & A: 5 Frequently Asked Questions About Special Needs Trusts

Are you considering providing financial support to a loved one with special needs?

It’s common for individuals to name their loved ones as beneficiaries in a will, but this approach can unintentionally lead to financial turmoil. By doing so, you could inadvertently disqualify them from crucial government programs, causing them to lose vital financial and medical assistance.

In this post, we’ll walk you through the ins and outs of special needs trusts, answering the top five questions you may have. As you explore this option, it is important to note that a skilled New York special needs trust attorney can provide invaluable guidance and expertise.  At New York Legacy Lawyers, our team of Brooklyn special needs trust lawyers may be able to help ensure your loved one’s future is secure. Contact us today at (718) 713-8080 to schedule a consultation.

What is a Special Needs Trust

A Special Needs Trust (SNT), also referred to as a supplemental needs trust, is a specialized legal arrangement designed to support an individual with a severe, long-term disability. The trust serves as a reservoir of funds to cater for the unique, ongoing needs of the beneficiary, aiming to enhance their quality of life without compromising their eligibility for government assistance.

The SNT is typically established within wills, becoming effective upon the death of the donor. Its primary purpose is to provide financial support beyond what the government provides, without causing the beneficiary to exceed the asset limit set by government assistance programs such as Medicaid. Therefore, the funds in the SNT are used to supplement, not supplant, government benefits.

The creation of an SNT in New York follows the same requirements as any valid trust. However, it must also include specific provisions mandated by New York State law. If correctly drafted to align with these laws, the trust assets won’t be considered when the government determines eligibility for aid.

An SNT can be initiated by anyone for the benefit of any disabled person, regardless of their relationship. Commonly, parents of disabled children establish these trusts, but they could also be set up by grandparents, other relatives, or even a compassionate neighbor. To ensure the government doesn’t count the trust income when determining benefit eligibility, SNTs are irrevocably structured.

In cases where a disabled person with assets decides to create an SNT for their benefit, any remaining assets upon their death must be used to reimburse the government for any public benefits they received during their lifetime. This arrangement helps preserve the individual’s assets while also ensuring they receive the necessary support from both the trust and government benefits.

Things You Need to Know About Special Needs Trusts

Here’s how this type of trust can protect a beneficiary with disabilities.

1. What Are the Benefits?

These types of trusts give you an extra layer of protection, ensuring that the beneficiary can acquire and maintain the level of support they need. Unlike a will, they give you the ability to dictate the way your money is spent.

2. How Can a Beneficiary Access their Trust?

Giving a loved one with special needs money directly can complicate issues in a number of ways. However, doing it through a trust doesn’t mean that it’s difficult for them to access it.

If they choose, they’re able to use those funds for recreational use, as well as to pay for personal care, medical expenses, accommodation, education and transport.

3. What Should Be Included?

It’s important to go through your trust thoroughly to make sure it covers all the bases. In order to be legally watertight, it has to include specific language.

First of all, it needs to state that it’s intended to provide “supplemental and extra care” rather than basic support. This clarifies that it funds extra services that the government won’t provide to the trustee.

The trust should also explain that its an exception to the Omnibus Budget and Reconciliation Act, and include any provisions from the United States Code.

Finally, there should also be information regarding the Medicaid payback process.

4. How Do They Affect Government Assistance?

Inheritance of anything over $2,000 can cause a disabled person to lose government benefits. This means they’ll no longer have access to subsidized housing, Supplemental Security Income, or Medicaid.

A special needs trust allows you to leave them money without the risk of disrupting their current support. This is because they address the complicated needs of each individual, separating their funds from their income.

5. What Options Do I Have?

There are two main options you can choose from.

The first is a first-person trust, which makes the beneficiary completely liable in the instance of another legal settlement, such as inheritance or a compensation claim.

The second is a third-party trust, which gives parents or guardians more control over their funds. The money is used to secure the care and support their loved one needs, and anything outside of that can be allocated as they wish.

Topic	Details
Benefits of special needs trusts	Provides an extra layer of protection for beneficiaries with disabilities by allowing the trustee to dictate the way the money is spent.
Accessing the trust funds	Beneficiaries can use the funds for recreational use, personal care, medical expenses, accommodation, education, and transport.
Necessary components of the trust	The trust should state that it provides supplemental care rather than basic support, be an exception to the Omnibus Budget and Reconciliation Act, and include Medicaid payback information.
Impact on government assistance	Inheritance over $2,000 can cause disabled individuals to lose government benefits, but special needs trusts allow them to receive funds without losing support.

How to Set Up Special Needs Trust

To establish a special needs trust, a trust document must be created that outlines how assets will be managed and distributed for the benefit of an individual with special needs. Although it’s possible to create a basic trust without legal assistance, many families choose to consult with a special needs trust attorney who can help customize the trust to their specific needs.

A special needs trust attorney can provide assistance and advice throughout the process to ensure that the trust document is tailored to meet the beneficiary’s unique requirements. They can also help navigate any complicated legal or financial issues associated with the trust.

In the trust document, the individual creating the trust, known as the “grantor” or “settlor,” assigns assets to be managed by a “trustee.” Typically, the grantor will name themselves as the trustee and appoint a trusted individual as the successor trustee. The grantor will remain in this role until they die, become incapacitated, or resign, at which point the successor trustee takes over.

Both the grantor and successor trustee are legally bound to follow the terms set out in the trust document, ensuring that the assets are used for the benefit of the individual with special needs, who is referred to as the “beneficiary” within the document. With the assistance of a special needs trust attorney, families can establish a trust that effectively supports and protects the beneficiary’s interests.

Getting the Help of a Skilled New York Special Needs Trust Lawyer

Don’t leave your loved one’s financial security to chance. Seek the help of a skilled New York special needs trust lawyer who can help you navigate this complex process and create a trust tailored to your family’s unique needs. At New York Legacy Lawyers, our team of experienced New York special needs trust attorneys may be able to help ensure that your loved one receives the support and care they deserve for years to come. Contact us today at (718) 713-8080 to schedule a consultation.

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Three Fundamentals of Estate Planning in NY

Estate planning law encompasses drafting of wills, trusts, guardianships and other documents that facilitate the transfer and management of property after death.

In the absence of a plan, the distribution of a loved one’s assets after death can sometimes get very challenging!

At New York Legacy Lawyers, our team of skilled New York estate planning lawyers’ goal is to help you to get ahead of these challenges by laying out the best possible plan for managing your assets in life and transferring them in death or incapacitation. Call us today at (718) 713-8080 to schedule a consultation.

Estate Planning NYC

Estate planning in New York City (NYC) extends beyond merely drafting a will. It involves strategizing to prevent family disputes, optimizing access to government benefits, minimizing tax liabilities, and ensuring your long-term care desires are clearly expressed. This guide aims to provide some fundamental insights into NYC estate planning.

Contrary to popular belief, estate planning isn’t just for those with large, taxable estates. Regardless of your estate’s size, having an estate plan is crucial. Estate planning includes more than tax minimization; it employs wills and trusts for various purposes suiting individuals across different financial circumstances.

Preparing a Last Will and Testament is a key part of estate planning. It allows an individual to dictate the distribution of their assets after their demise. In the absence of a will (a state referred to as intestate), the law of the jurisdiction where the deceased lived determines how the assets are distributed. For instance, in New York, if a person dies intestate, leaving behind a spouse and two children, the spouse gets the first $50,000 of the estate plus half the remaining balance. The children share the rest. If a person wishes to leave all assets to their spouse, this would not be followed without an estate plan.

Please continue reading to see how Wills, Guardianships, & Trusts form the essentials of any estate plan.

Estate Plan Fundamental #1: Draft a Last Will and Testament

A Will is a legal document used to outline your preferences regarding how your estate should be handled after your death. A will is very important to your heirs as it eases the transfer of property quickly and helps the survivors avoid unfair tax burdens. It is also a way of expressing your deepest sentiments to your loved ones.

Depending on the estate size and preferences, a will can be a simple single-page document or a large detailed volume. A will should describe your estate, the people who will receive specific properties, instructions about care of minors, or disinherit people expected to get the property.

Wills requirements in Brooklyn, New York, state that a testator (the person making the will) should be an adult of sound mind. The will should be written and signed by the testator, unless they are unable to do so in which case, the testator must appoint another person to sign it before a witness, and the signature witnessed.

A will may have legal limitations which may restrict the testator from giving the full effect of their wishes. It’s best to discuss these points with an estate planning attorney directly.

Brooklyn estate planning attorney

Estate Plan Fundamental #2: Plan for Guardianship

Your estate plan must address the issue of caring for your children in the future in case both parents are deceased (or unfit). Though no one wishes to die and leave their young dependent children, it can happen, and you need to be prepared for this. Your estate planning should include Guardianship provision, which is a legal relationship established by a court of law to give the responsibility of care and protection of minors to someone other than the parents. The court gives legal authority to the appointed guardian to make decisions concerning the child.

In Brooklyn, New York, the guardian must be 18 years and above, and a citizen or legal resident of the United States. Guardianship provisions should be included in your will alongside your other instructions upon death. You can also appoint a guardian for your minors in your will. When you include guardianship provision in your will, you will be at peace knowing that your children will be well taken care of in case of your death.

If you leave out a guardianship provision in your will, or have not established guardianship provisions, a judge will appoint a guardian for your children (without your input). You might imagine, this could end up very messy!

Estate Plan Fundamental #3: Establish a Trust

In estate planning there are several different types of trusts, but at that root they all function is similar ways.  When you establish a trust, you are creating a separate legal entity that you will then transfer some, or all, of your assets to.  When creating the trust, you will decide on a means for distributing the assets and you will designate a beneficiary of that trust.

Sometimes it’s easier to describe something like a trust by giving an example.

John and Kate set up a trust naming themselves as trustees.  They transfer their assets into the trust and still retain access to all the assets they owned before the trust was established).  They designate that upon their passing, the successor trustee will be their daughter Lisa and the assets in the trust shall be disbursed according to their wishes.

If you need other examples, please connect with us and we will walk you through all sorts of different trust types and which one best applies to your situation.

Estate Plan Fundamental	Description
Draft a Last Will and Testament	A legal document outlining how your estate should be handled after your death. It simplifies property transfer, helps survivors avoid unfair taxes, and allows you to express your sentiments. Requirements in Brooklyn, New York, include being an adult of sound mind and proper signing and witnessing.
Plan for Guardianship	Address the care of your children in case both parents are deceased or unfit. Include Guardianship provisions in your estate plan, specifying who will care for your minors. In Brooklyn, guardians must be 18 or older, U.S. citizens or legal residents.
Establish a Trust	Create a separate legal entity to transfer some or all of your assets. Decide on asset distribution and designate a beneficiary. Trusts ensure assets are distributed according to your wishes. Example: John and Kate set up a trust, designating themselves as trustees, and their daughter Lisa as the successor trustee.

Estate Plan Fundamental #4: Get an Estate Planning Attorney

While estate planning is critical, it is quite complex, and you will likely need an estate planning attorney to help navigate the details and provide you with advice specific to your situation.

We help people just like you create all these documents and more with our support.  Contact us today for assistance. Seek legal guidance from our New York legacy lawyers.

LIVING WILL VS. LAST WILL AND TESTAMENT

A living will and a last will and testament are two essential legal documents of an individual’s estate plan. Although these documents share similarities in that they provide instructions for the management of a person’s affairs, they have distinct differences in focus, duration, and revocability. 

An advance directive, commonly referred to as a living will, is a legally binding document that allows people to express their medical treatment and decision-making preferences in case they become incapable. The document typically encompasses directions for life-sustaining measures, organ donation, and other medical interventions. It is a critical tool for ensuring that an individual’s wishes regarding their medical care are respected and followed, even if they are unable to communicate them at the time. A living will only goes into effect if the individual becomes incapacitated and can be revoked or revised at any time while they are still alive. 

Alternatively, a last will and testament is a legal instrument that specifies an individual’s desires for the allocation of their assets following their demise. It includes the designation of an executor to manage the distribution of assets and naming of beneficiaries. A last will and testament only goes into effect after the individual’s death and can only be changed by creating a new will or adding a codicil, which is an amendment to the existing will. 

Despite these differences, a living will and a last will and testament are crucial components of an individual’s estate plan. They ensure that a person’s medical and financial wishes are followed and can provide peace of mind for themselves and their loved ones. At New York Legacy Lawyers, our team of New York estate planning lawyers may be able to guide you in creating a comprehensive estate plan that includes both a living will and a last will and testament. Contact us today at (718) 713-8080 to schedule a consultation.

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Estate Tax for Beginner: An Easy to Read Guide to Estate Taxes

Many politicians use the words “death tax” to refer to a tax on your estate. This tax is the tax you pay to transfer your estate to your heirs upon your death. It’s a highly contested political issue many Americans don’t completely understand. 

So, will you have to pay estate taxes? If so, how much? What does it mean for your heirs?

Navigating the complexities of estate taxes can be daunting, but with the guidance of an experienced Brooklyn estate tax planning lawyer from New York Legacy Lawyers, you can gain clarity and peace of mind. Our attorneys can assist in simplifying the intricate world of estate taxes, ensuring you understand the process every step of the way. Contact us today at (718) 713-8080 to start your journey toward informed estate planning and secure a thriving future for your loved ones.

Here’s a simple guide to this little-understood, and yet controversial tax.

New York Estate Tax

New York imposes a state estate tax, which means that when a person passes away as a resident of New York or has property physically located within the state, their estate may be subject to taxation both at the federal and state levels. It’s important to know that the federal estate tax and New York’s estate tax operate independently of each other.

In New York, residents and some non-resident property owners are subject to a state-level estate or inheritance tax upon death, in addition to the federal estate tax. New York’s estate tax rate is graduated, starting at 3.06% and reaching a maximum rate of 16%.

For New York estate tax purposes, when the total value of assets passing to beneficiaries, excluding a spouse or charity, is below a specific threshold ($6.58 million in 2023), those assets are completely exempt from taxation, and New York estate taxes do not apply. However, as the estate’s value surpasses this threshold, the exemption gradually diminishes. If an estate exceeds the threshold by more than 5% ($6,909,000 in 2023), it loses the exemption entirely, and the entire value of the estate’s assets becomes subject to New York estate tax. This change in estate tax treatment for estates exceeding the New York threshold is often referred to as a “cliff tax.” Estates falling within the range between the threshold amount and the 5% excess are subject to partial New York estate tax.

At New York Legacy Lawyers, our Brooklyn estate tax planning lawyers can help you in exploring options to minimize your estate tax liability and ensure a seamless transition of assets to your loved ones. We can guide you through the intricacies of estate planning, safeguard your legacy, and secure your family’s financial future. Contact us today to schedule a consultation and take the first step toward achieving peace of mind in your estate affairs.

Estate Value	New York Estate Tax Rate	Exemption Amount	Additional Notes
Up to $6.58 million	0%	$6.58 million	No estate tax owed.
Over $6.58 million to $6,909,000	Graduated rates	$6.58 million	Exemption gradually diminishes.
Over $6,909,000	16%	No exemption	Entire estate value subject to tax.

You May Have No Estate Tax at All…

The estate tax brackets range from 18% for estates valued under $10,000 to 40% for estates valued over $1 million. There is a catch.

There is a lifetime exemption amount of up to $11.18 million. That means you can leave up to that amount to your heirs before the estate pays a tax.

If your estate is valued more than the exemption amount, it will only pay taxes for the amount over the exemption amount.  

Keep in mind that this amount is per person. Married couples can leave up to $22.36 million to their heirs with no tax.

The only people paying a tax on their estate are those who would fall into the 40% tax bracket. Even then, there are generous allowances for gifts.

Unrealized Capital Gains May Be Taxed

Unrealized capital gains account for as much as 55% of the total tax revenue from estates because the IRS doesn’t tax investment profits until you sell and “realize” the gains.

Depending on how you plan your estate, these investment gains and losses may be subject to taxation.

For example, you might transfer a valuable asset into an irrevocable living trust to reduce your taxable estate upon your death.

The Individual States With Their Own Estate Tax

Depending on where you live, your estate could be subject to state taxes. Keep in mind that state taxes may come with different exclusion amounts.

When you get around to estate planning, be sure to discuss these matters with your estate lawyer. Your lawyer can help you plan the best course of action for your estate.

In the state of New York, all estates valued more than $5.25 million will pay a 3.06% tax. And, those valued over $10.1 million will pay a 16% tax. The escalation you’re seeing is a graduated tax.

Estate Planning is Essential

Estate planning is important for estates of all values. However, it becomes even more important as the estate becomes more valuable and complex. Each estate will need its own considerations.

You should consult an estate planning lawyer to help you get your affairs in order before you die. This one step alone will save your heirs tons of trouble, and quite literally a lot of expenses/missed inheritance, following your passing.

Contact us today to request an estate plan consultation.

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from New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/estate-tax-for-beginner-an-easy-to-read-guide-to-estate-taxes/

Living Trust vs. Will: What’s the Difference? Which Is Right for You?

Facing the reality of death or incapacitation may be challenging, but it’s essential to have these conversations, especially if you have young children or a non-traditional family structure. Ensuring your wishes are respected and your loved ones are protected is where estate planning comes into play.

Both a will and a living trust can help you manage your estate and medical concerns in case you’re no longer able to do so yourself. But how do you know? Is a living trust right for you, and do you need one? How do you set up a will? Can a will and living trust be used together?

To make an informed decision and navigate the complexities of estate planning, consider reaching out to an experienced estate planning attorney in New York. At New York Legacy Lawyers, our team of skilled New York estate planning lawyers may be able to guide you in choosing the most appropriate option and help you create a comprehensive plan tailored to your needs. Call us today at (718) 713-8080 to schedule a consultation.

New York living trust lawyer

What is a Living Trust?

A living trust is a legal document created by the grantor, the individual who contributes assets to the trust. The objective of a living trust is to maintain ownership of your assets during your lifetime. The general strategy involves moving as many assets as possible into the trust, although certain assets like life insurance and retirement accounts are not eligible for inclusion. Once placed in the trust, these assets are administered for your advantage throughout your lifetime.

The responsibility of managing the trust falls upon a trustee of your choice. While you have the freedom to appoint anyone as the trustee, it is common to designate yourself for full control. In addition, you can also name a successor trustee who takes over the role after your passing. Once you pass away, the trustee maintains management and protection of your assets and subsequently allocates them to your designated beneficiaries.

One advantage of a living trust is its capability to avoid the probate. Probate involves court procedures for validating and executing a will, which can be a time-consuming process that can take several months and become expensive over time. However, a trust can eliminate the need for probate while also allowing you to orchestrate an immediate distribution of your assets through the trust terms.

If you’re curious about the intricacies of living trusts and how they can help you achieve your estate planning goals, it is crucial to seek guidance from a skilled New York estate planning lawyer. At New York Legacy Lawyers, our attorneys can help you understand the concept of a living trust and guide you through the process of establishing one that is tailored to your unique needs. We can provide clarity and peace of mind for your estate planning journey. Contact us today to discuss your specific situation and ensure that your assets are protected for the future.

Complexity

Living trusts and wills do not have to be terribly complicated. In many states, handwritten wills are acceptable (though not advised). They become more complicated if you have significant assets such as property, vehicles, stocks, or multiple potential family and friends who believe they are entitled to your assets.

There are two forms of living trusts, irrevocable and revocable. Irrevocable trusts aren’t as popular because once the papers are signed, they can’t be changed. They typically function as a means of protecting assets from a lawsuit or taxes.

A revocable trust can be changed if you change your mind or as your financial situation necessitates.  It offers benefits toward reducing the complexity of distributing assets after the death of the holder.

Privacy

A revocable living trust is a private contract between the trust entity and trust holder. It helps your beneficiaries by enabling them to avoid probate, the court process in place to distribute the assets after the death of the estate holder.  In addition to the protection from probate, trusts are private matters and not a matter of public record.

Conversely, when a will is filed with the court to begin probate, it becomes public record. The assets and finances changing hands are open for anyone to see.

Health

A living trust manages your financial affairs during the end of your life and after death. A will handles affairs when you are gone. Those of advanced age or suffering from illness may consider a living will.

A living will handles your medical affairs should you be unable to advocate for yourself. You can designate whether or not you want to receive life-saving treatments like life support or CPR. This is the only time a living will is necessary.

A living trust allows you to name a successor trustee in the event you become mentally incapacitated. If you have a same-sex partner, this gives your partner rights to advocate for you and your estate. This also applies if you are unmarried but want to designate a friend or non-family member as your advocate.

If you only have a will, the court designates someone to handle your affairs. You can file for a power of attorney to avoid this.

Matters Involving Children

Living trusts allow you to leave property to children. It is illegal for children under 18 to own property so you will have to designate a manager. Only a will allows the estate holder to arrange for their children’s guardianship and property.

Your Estate After Death

To designate property in a living trust, you must transfer the property into the trust. For many items, making a list and attaching it to the trust document is all that’s required. Larger items that have a title document require that you rename the title to the name of the trust.

You will need to name someone to wrap up your estate affairs after you die. In a will,  this person is called an executor. They are in charge of managing your assets and distributing them after probate. In a living trust, the successor trustee manages the assets that are only in the trust.

Most estates will require an executor even if most of the property is transferred to the trust. The executor of the will and a successor trustee can be the same person.

Factors	Living Trust	Will
Complexity	Two forms: irrevocable and revocable. Revocable trusts can be changed while irrevocable trusts can’t be changed once papers are signed.	Handwritten wills are acceptable, but not advised. It can become complicated if there are significant assets or multiple potential beneficiaries.
Privacy	A private contract between trust entity and holder, and helps beneficiaries avoid probate.	Becomes public record when filed with the court for probate.
Health	Manages financial affairs during the end of life and after death. Allows naming of successor trustee if mentally incapacitated.	Handles affairs after death. Living will necessary for medical affairs if unable to advocate for oneself.
Matters Involving Children	Allows leaving property to children, but requires a designated manager as children under 18 can’t own property.	Only a will allows for arranging children’s guardianship and property.
Your Estate After Death	Property must be transferred to the trust. Large items require renaming of the title to the trust’s name. Successor trustee manages assets in the trust.	Executor manages assets and distributes them after probate. Most estates require an executor, even if property is transferred to the trust.

Living Trust vs. Will

The proper planning of your estate will protect your assets and your loved one’s rights. Leaving it to the court will often end in disappointment for all parties.

A living trust will help your family maintain privacy. It will also protect the rights of non-traditional family members. Trusts are often a little more difficult to contest in a lawsuit should an issue arise.

A will allows you to make arrangements for young children after your death. You can also designate a manager for any property left to them.

The answer to which you should choose between a living trust vs. will?

A combination of both will provide you with the best options for caring for your estate and your family.

Don’t wait until it’s an emergency to plan your estate. Get started with us today.

I. Introduction to Estate Planning

• A. Definition of Estate Planning
• Estate planning is the process of arranging for the management and distribution of one’s assets and affairs after death.
• B. Importance of Estate Planning
• Estate planning ensures that your wishes are carried out regarding asset distribution and guardianship of minor children.
• It minimizes potential conflicts and legal complications among family members.
• Estate planning allows for tax planning and asset protection.
• C. Key Entities:
• 1. Testator
• The testator is the person who creates and executes a valid will or living trust.
• 2. Intestate
• Intestate refers to the condition of dying without a valid will or living trust.
• 3. Intestacy Laws
• Intestacy laws are state laws that govern the distribution of assets for individuals who die without a will or living trust.
• D. Overview of Asset Distribution and Beneficiaries
• Asset distribution involves transferring a person’s assets to designated beneficiaries or heirs.
• Beneficiaries are individuals or entities named in a will or living trust to receive assets, benefits, or property from the estate.
• Proper estate planning ensures that assets are distributed according to the testator’s wishes, minimizing disputes and ensuring the intended recipients receive their intended share.

II. Understanding Wills

• A. Definition and Purpose of a Will
• A will is a legal document that specifies how a person’s assets should be distributed after their death.
• The primary purpose of a will is to ensure that the testator’s wishes are carried out regarding the distribution of their assets and the appointment of guardians for minor children.
• B. Role of the Testator in Will Creation
• The testator plays a central role in will creation by making decisions about asset distribution, guardianship, and the appointment of an executor.
• They have the freedom to outline specific instructions for their assets and designate individuals or organizations as beneficiaries.
• C. Executor and Probate Process
• An executor is an individual appointed by the testator to carry out the provisions of the will and administer the estate.
• The probate process involves validating the will, settling outstanding debts and taxes, and distributing assets to beneficiaries.
• D. Handling Property Ownership and Privacy
• A will can address property ownership by designating how ownership should be transferred to beneficiaries.
• It may include provisions for the sale or distribution of specific properties.
• Wills are generally public records, potentially affecting the privacy of the testator and beneficiaries.
• E. Protecting Minor Children and Guardianship Designation
• A will allows the testator to designate guardianship for minor children in the event of their death.
• It ensures that the testator’s wishes for the care and upbringing of their children are documented.
• F. Contesting a Will and Legal Considerations
• Interested parties may contest the validity or terms of a will under certain circumstances.
• Legal requirements and formalities must be followed to create a valid will, and it is important to consider potential challenges during the drafting process.

III. Exploring Living Trusts

• A. Definition and Purpose of a Living Trust
• A living trust is a legal arrangement where assets are held and managed by a trustee for the benefit of designated beneficiaries.
• The primary purpose of a living trust is to provide for asset management and distribution during the testator’s lifetime and after death.
• B. Benefits of Revocable Living Trusts
• Revocable living trusts offer flexibility, as the testator can make changes or revoke the trust during their lifetime.
• They help avoid probate and allow for privacy in asset distribution.
• C. Trustee and Successor Trustee Roles
• A trustee is responsible for managing and distributing assets according to the terms of the living trust.
• A successor trustee steps in if the original trustee becomes unable or unwilling to fulfill their duties.
• D. Trustor’s Control and Flexibility
• The trustor retains control over the trust assets during their lifetime and can make changes as needed.
• Assets can be added or removed from the trust, providing flexibility.
• E. Asset Management and Protection
• A living trust allows for centralized management of assets, potentially simplifying administration.
• It may offer asset protection benefits, such as protecting assets from creditors or ensuring their intended use.
• F. Incapacity Planning and Advanced Healthcare Directives
• A living trust can include provisions for managing assets in case of the trustor’s incapacity.
• Advanced healthcare directives within the trust can guide medical decisions.

IV. Comparison: Wills vs. Living Trusts

• A. Probate Process and Cost Considerations
• Wills typically go through probate, which can be time-consuming and costly.
• Living trusts may help avoid probate, potentially saving time and money.
• B. Privacy and Public Record
• Wills are generally public records, whereas living trusts maintain privacy.
• A living trust allows asset distribution to remain private and confidential.
• C. Avoiding Intestacy Laws and Trust Administration
• A will protects against intestacy, ensuring asset distribution according to the testator’s wishes.
• Living trusts bypass intestacy laws and may simplify the administration process.
• D. Pour-Over Will as a Complement to Living Trusts
• A pour-over will ensures that any assets not included in the living trust are transferred to it upon the testator’s death.
• It acts as a safety net to capture any overlooked assets and maintain the overall estate plan.
• E. Asset Distribution and Beneficiaries
• Both wills and living trusts allow the testator to designate beneficiaries and specify how assets should be distributed.
• The chosen distribution method and flexibility may vary between the two estate planning options.
• F. Managing and Preserving Assets
• Both wills and living trusts provide mechanisms for managing and preserving assets for the benefit of beneficiaries.
• Considerations include the nature of the assets, ongoing management, and tax implications.

V. Making the Right Choice

• A. Factors to Consider in Estate Planning
• Various factors influence the choice between a will and a living trust, including asset complexity, family dynamics, and personal preferences.
• Other factors include tax planning, privacy concerns, and the need for flexibility.
• B. Individual Circumstances and Goals
• The individual’s unique circumstances and goals play a significant role in determining the most suitable estate planning option.
• Factors such as age, health, family structure, and financial situation should be considered.
• C. Consulting an Estate Planning Attorney
• Seeking advice from an experienced estate planning attorney can provide valuable guidance in making informed decisions.
• An attorney can assess individual circumstances, explain legal implications, and provide personalized recommendations.
• D. Reviewing and Updating Estate Plans
• Estate plans should be periodically reviewed and updated to reflect changes in personal circumstances, tax laws, and beneficiaries’ needs.
• Regular reviews ensure that the estate plan remains relevant and effective over time.
• E. Importance of Flexibility and Lifetime Management
• Flexibility is important in estate planning to accommodate potential changes in asset distribution and family dynamics.
• Lifetime management of assets is essential to ensure they align with the intended goals and changing circumstances.
• F. Balancing Complexity, Cost, and Personal Preferences
• The complexity and cost associated with wills and living trusts should be weighed against the desired level of control, privacy, and ease of administration.
• Personal preferences and peace of mind play a significant role in the decision-making process.

Can You Have Both a Will and a Living Trust

Many individuals wonder if they can incorporate both a will and a living trust in their estate planning strategy. The answer is affirmative, and it can even be advantageous in specific situations. By combining a will and a living trust, individuals can ensure that their assets are distributed according to their preferences and their loved ones’ future necessities are fulfilled.

A living trust can provide more security to those who wish to evade probate or have minor children who might not be capable enough to manage their inheritance prudently if they receive it as a lump sum at a young age. On the other hand, a will permits the nomination of a guardian for underage children, which is not possible with a trust.

A suggested approach is to use a will to finance the living trust with any assets that were not previously included in the trust before death. A “pour-over” will directs that any assets outside the trust at the time of death be shifted to the trust, which will be supervised by a successor trustee for the beneficiaries’ advantage. This strategy guarantees that the assets intended for children are managed according to the creator’s directives.

To identify the best course of action for one’s unique circumstances, it’s recommended to seek guidance from a competent estate planning attorney in New York. They can help navigate the complexities of wills and trusts and create a plan that meets both the individual’s and their loved ones’ requirements. Contact us today at (718) 713-8080 to schedule a consultation.

Living Trust vs. Will: A Look into the Best Choice for Your Situation

58% of Baby Boomers (ages 53-71,) and 81% of those 72 or older have a living will or trust. They already see how smart it is to begin planning for the fact they will not be around forever. Likely this planning is tinged with years of experience watching family and friends go through the confusion and disputes that often arise over assets and estates when the original owner of them passes without making their wishes known.

One estate planning tool that many of these baby boomers have turned to, and that many more are looking at, is a living trust. A living trust and a last will & testament often go hand-in-hand. Here’s what you need to know about how they compare. Reach out to us at the New York Legacy Lawyers to consult with a skilled New York estate planning lawyer. Discover valuable estate planning tips and determine whether a will or trust is the best option for your situation.

PROBATE IS DIFFERENT BETWEEN A TRUST AND A WILL

Unlike a will, a living trust is something you can use and benefit from while you are still alive. In a living trust, you transfer some or all of your assets into the trust (as the grantor), then you manage the trust as the trustee, and receive the benefits of the trust as the original beneficiary. Knowing that you may become incapable or unfit to manage your assets (trust) one day, you can designate someone to be responsible for your property if and when you become mentally or physically unable to do so. When you pass away, a successor trustee becomes responsible for carrying out the intent of the trust to whichever beneficiaries you’ve designated.

You and your spouse will likely want to be co-trustees while you are still alive, maintaining full control of your assets. Your spouse can take over if you become incapacitated.

Most couples name their children as successor trustees in the event of their death. If they are uncomfortable with this arrangement, they can appoint a professional to oversee their assets.

While you are alive, your living trust can be altered or dissolved at any time.

Both a will and trust give detailed inheritance instructions, and allow you to designate someone to oversee the distribution of your assets. With a will, however, your document will likely go through probate. This process can take months and become costly if it is contentious. Your assets will be tied up during this time.

With a living trust, the parts of your estate in the trust will not pass through probate court. Instead, the person you have designated as your trustee will carry out the requirements you outlined in the trust.

OPACITY=TRUSTS | TRANSPARENCY=WILLS

Official documents, such as a will, and those that go through probate, become a part of the public record. Living trusts will not be subject to public scrutiny unless a beneficiary or trustee demands court approval. Many people prefer that their wishes remain a private matter and a trust is a great way to keep the value and assets of your estate confidential.

Why would that matter? Imagine you’re leaving $2 million for your 15-year-old son to inherit when they turn 20 years old. You can imagine some people will want to share their ideas on how to spend $2 million with anyone new to that kind of cash on hand. Or worse, if you wanted to leave that $ to your son, but your estranged sister knew about it and preyed on their guilt to siphon some of it away.

These are only two scenarios, the point here is that the fewer people you have poking around your estate and knowing who received what, the better-off the beneficiaries are likely to be.

DIFFERENCE BETWEEN TRUST AND WILL

Wills and trusts are legal documents that are commonly utilized for transferring assets to loved ones after one’s death. Despite sharing some similarities, such as the ability to modify or revoke them during one’s lifetime, the primary difference between these documents lies in their approach to asset distribution among beneficiaries.

A will, also known as a last will and testament, designates an executor to manage the distribution of assets after death. In addition, a will can also serve to appoint a guardian for minor children and outline funeral arrangements. However, a will must go through the probate court process in order to be legally binding. This involves the court assessing the value of the property left by the will and approving its distribution to beneficiaries. Unfortunately, probate can be time-consuming, expensive, and public, as the details of the estate become part of the public record.

On the other hand, a trust establishes a relationship between the assets of the owner and a trustee who manages them for the beneficiaries. Assets placed in a trust bypass probate, reducing court costs and the time required to receive inheritances. Furthermore, trusts are private documents that cannot be viewed by anyone outside of the trust, making them ideal for those concerned with privacy.

Trusts offer greater control over the distribution of funds, particularly for those with minor children, numerous beneficiaries, or concerns about their heirs’ spending habits. For example, an individual may opt to distribute a child’s inheritance over time to prevent overspending, or delay the distribution of assets until the heir reaches a specific ageTrusts can also be beneficial in supporting someone with special needs without affecting their eligibility for government benefits.

FOR ESTATES OF A CERTAIN SIZE, TAX PLANNING IS CRITICAL

Many folks with larger estates can take advantage of tax exemptions by dividing their assets smartly. Trusts and Wills have very different tax exposure risks.  Make sure you choose to work with an estate planning attorney that knows about how taxes will affect your estate.

401K AND LIFE INSURANCE

Many couples have a 401K or life insurance policy that they would like to leave to their children, if they do not reach the age of retirement. If you have a will, those funds would go into the hands of a court-approved guardian until your child reaches the age of 18.

With a revocable living trust, however, a trustee can accept these funds in the event of your death. You can decide if your child receives them at age 18, 25, or 30, or through some other manner other than age.

THE LIVING TRUST AND THE WILL

Whether you draw up a living trust or a will, or likely both, depends upon the size of your estate and the complexity of your situation. A little research and consideration will save you and your loved ones a lot of time and heartache.

WE ARE HERE TO HELP.

We want you to be able to discuss these topics with familiarity and confidence that you have an expert team of New York legacy lawyers supporting you and your family when you need it. Contact us today; we’ll start you on your path to estate planning.

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from New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/living-trust-vs-will-whats-the-difference-which-is-right-for-you/

Estate Planning for Dummies: Everything You Need to Know

Worldwide, every minute, 120 people pass away. Death is not something we like to think about, but it is a certainty in all our lives. We don’t get to choose when our time in this world ends. One minute you’re there, and the next, someone has to carry on without you.
How can you help your family, friends, and loved ones carry on after you pass? The answer: establish an estate plan today.  Don’t wait until it’s too late to take action. Getting started on your estate plan is not as hard as you might think, but it helps to have a starting place. At New York Legacy Lawyers, our New York estate planning attorneys can assist in drafting essential documents such as wills, trusts, and powers of attorney, ensuring that your assets are protected and distributed according to your intentions. Take the first step today and contact us at (718) 713-8080 to begin the process of securing a stable future for your loved ones.

To help you get started with your estate plan, we put together this short Estate Plan for Dummies article that boils down the complexities of estate planning into bite-sized morsels. 

Of course, we don’t think you’re a dummy at all. You wouldn’t be reading this article if you were! 

Here’s what you need to remember about everything you’re about to read. You don’t have to be a legal genius to start the process of protecting your family. Our New York estate planning attorneys at New York Legacy Lawyers have put together estate planning tips to help you. You can start today, with the right help!

ESTATE PLANS FOR DUMMIES: WHAT YOU SHOULD KNOW ABOUT ESTATE PLANNING

Estate plans should be a top priority as they cover many areas of your life, including personal wishes, healthcare desires, financial matters, and even self-advocacy. Most people are familiar with at least one idea of estate planning. Often the document people tend to start with is a Last Will & Testament.

In your last will, your goal is to identify tangible and intangible assets and to describe what you want to happen with them, clearly. Beyond assets, your last will provide a platform for you to share thoughts and even embed other parts of your estate plan, such as a trust.

NYC estate planning attorney

TIPS FOR WRITING YOUR WILL

When you sit down to write your will, you might want to identify to the best of your ability, the answers to these questions.

1. What properties do you own?
2. Will you need a guardianship plan for your children?
3. Who will be your beneficiary?
4. Who should get ownership of pets?
5. Who is your executor?
6. Have you considered a trust?
7. Do you trust anyone else to make financial decisions for you?
8. Do you trust anyone else to make healthcare decisions for you?
9. How much will your estate pay in taxes after you die?
10. Is there anyone you DON’T want inheriting any part of your estate?

These questions are only the starting point. Many situations could make your last will difficult to draft on your own.

Trusts for Dummies

A trust is a legally binding document that enables an individual or organization to oversee and hold your finances and assets for your own benefit or for the benefit of others. It serves multiple functions, including estate planning, tax planning, medical planning, and charitable giving.

In contrast to a will, which takes effect after death, a trust has the ability to manage and invest your assets both during your lifetime and after your passing. Furthermore, it bypasses the probate procedure, which can be lengthy, costly, and exposed to the public. The individual who creates the trust is referred to as the “grantor” or “trustor,” while the person entrusted with managing the assets is known as the “trustee.” The recipient of the assets is called the “beneficiary,” and the assets held within the trust are known as “trust assets.”

Various types of trusts exist, including living trusts and testamentary trusts. A living trust remains active during your lifetime and may continue to operate after your death, providing ongoing management and distribution of assets. On the other hand, a testamentary trust is established through your will and only takes effect following your death. There are also specific types of trusts designed for particular situations, such as supplemental needs trusts and spendthrift trusts. Supplemental needs trusts enable you to allocate funds for individuals with disabilities while ensuring their eligibility for government assistance is maintained. Spendthrift trusts, on the other hand, restrict access to funds for individuals who struggle with managing their finances or have multiple creditors. You have the option to create both of these trusts either as living trusts or testamentary trusts.

Maximize the protection and preservation of your assets for future generations with the assistance of a New York estate planning attorney. At New York Legacy Lawyers, our skilled attorneys have knowledge of trust law and can guide you through the complexities of establishing and managing trusts, allowing you to secure your legacy and provide for your loved ones. Contact us today to schedule a consultation and take the first step towards a secure future.

CLARIFYING FINAL WISHES

While answering the questions, think about who will be there to interpret the answers you’re pondering. Will it be your eldest child? A grandchild? Your spouse? Try to frame your answers in ways that would make sense to them. This person, or these people, will be the executor of your decisions.

Your executor will be responsible for ensuring the beneficiaries of your will receive what you want them to.

CHOOSING POWER OF ATTORNEY

A Power of attorney, or POA, gives someone the authority to act on your behalf regarding legal matters, financial situations, or in regard to your health. In this article, we’re mainly talking about two types of POA.

First, there is the financial POA. This POA is the person who will be able to speak on your behalf about your finances if you can’t be there, or are unable to manage them due to ongoing health concerns (dementia, incapacity, etc.).

Second, is the healthcare POA. In New York State, the proper title of a healthcare POA is a Healthcare Proxy. Your healthcare proxy is the individual that will make decisions on your behalf regarding crucial health matters. Some of the decisions your healthcare proxy might make for you include life support choices, and following through on a do not resuscitate order, or basic healthcare decisions if you’re not able to understand them at some point.

Wills and Trusts for Dummies

Wills and trusts are both legal tools for passing on your possessions when you’re no longer around, and both may be adjusted or withdrawn while you’re alive. The main difference between the two lies in how they transfer property to the people you’ve chosen to receive it.

A will, or Last Will and Testament, is a written statement where you name an executor who will manage the division of your possessions after you’re gone. A will can also be used to choose a guardian for your underage children and can contain details about your funeral or memorial service, such as whether you prefer burial or the spreading of ashes.

A trust, meanwhile, is a legal document that forms a fiduciary relationship between your assets and a selected person or organization. This selected party, called the trustee, has the power to manage your assets for the benefit of your chosen recipients. Trusts are classified into irrevocable trusts, which can’t be changed once they’re set up, and revocable (living) trusts, which you can alter anytime you want.

After you’ve written a will, you might want to think about adding a trust to your estate plan if:

• You Want to Avoid Probate: Wills require going through the probate court process to be legally enforced. Any property given through a will must go through probate, which involves assessment, inventory, and court-approved distribution before the people you’ve chosen can receive their inheritances. In contrast, any assets in a trust don’t have to go through probate, which can make the inheritance process quicker and less expensive.
• You Value Privacy: The probate process for wills is public, which means the details of your estate are made public record. Trusts, on the other hand, are private documents that can’t be accessed by anyone not involved.
• You Have a Large Estate: If you have a lot of assets, valuable possessions, or a successful business, you might need a trust to reduce your tax liabilities. Both living and irrevocable trusts take effect as soon as they’re set up, meaning they can be used right away for tax purposes.
• You Want to Reduce Legal Costs: A well-organized trust can significantly lower the chance of legal disputes after you’re gone. Trusts are legally binding and hard to challenge, which means your heirs are more likely to respect your wishes, reducing the need for court action.
• You Have Specific Beneficiary Needs: If you have underage children, are worried about the financial responsibility of your chosen recipients, or have a lot of people you want to leave things to, trusts offer more control over distribution. For example, you could arrange for inheritances to be given out gradually to prevent irresponsible spending, instead of releasing all the money at once.

DON’T FORGET YOUR DIGITAL ASSETS

More and more, digital assets are becoming a standard part of these estate planning discussions. Your digital assets include things like usernames and passwords for your online accounts, logins for your computer(s), phones, and other devices, perhaps even an online business.

Having information regarding your digital life and assets available for your chosen loved one ahead of time can save them a world of trouble, and heartache. Now, they’ll be able to easily log in to pay bills or access other types of financial information. On a more personal level, they can access your photos, your documents, even your social media – and start taking the necessary steps to store those aspects of your life elsewhere or in the case of social media, transition them appropriately.

AVOIDING ESTATE PLANNING BLUNDERS: TIPS FOR SUCCESS

Here’s a guide to assist you in writing your Estate Plan and avoiding common mistakes. Listed below are some frequently occurring Estate Planning mistakes that you might want to avoid.

• Neglecting Estate Planning. Unfortunately, many of us tend to postpone creating an Estate Plan. However, failing to prioritize or complete your Estate Plan puts the financial future of your estate, your legacy, and your loved ones at risk.
• Failing to Communicate with Family and Friends. While there may be circumstances where it’s not possible to discuss your Estate Plan with loved ones, it’s generally a good idea to have at least a brief conversation with them. Doing this can help in establishing clear expectations and avoiding disagreements or conflicts among your beneficiaries after you pass away. If discussing your plan is not an option, you can include language in your estate documents that specifies that anyone who contests the plan may be excluded.
• Naming One Beneficiary. It is important to name multiple beneficiaries for your assets in your Estate Plan. It is recommended to list multiple beneficiaries to guarantee the distribution of your assets.
• Failing To Designate a Power of Attorney or Health Care Proxy. Appointing a Power of Attorney and/or a Healthcare Proxy is crucial since they will act on your behalf if you are unable to make decisions due to incapacitation. These roles typically expire upon your passing, so it’s essential to ensure they are in place while you have the capacity to decide.
• Disregarding the Need for Preparing Final Arrangements. It’s important to plan ahead for your final arrangements to make things easier for your loved ones during a difficult time. This includes deciding on your funeral or burial arrangements and communicating your wishes for end-of-life care, such as hospice or assisted living.
• Forgetting to Include Digital Assets. Don’t forget about your digital assets. Create a Digital Estate Plan to specify how you’d like these digital assets to be handled after you pass away. This is a relatively new aspect of estate planning, but it’s important given the technological world we live in.
• Failing to Consider Your Children’s Futures. When creating an Estate Plan, it is essential to thoughtfully contemplate how you intend to allocate your assets among your heirs. This is especially important if your children are still young, as the wording of your directives can have a significant impact on their future. You may want to provide specific instructions on how your guardians should use the assets to benefit your children or to take care of them in other ways.
• Overlooking Tax Obligations. It is crucial to consider tax liability when creating an Estate Plan. Estate taxes can significantly reduce what your beneficiaries receive. You should also think about how gifts to individual heirs may impact their taxes.
• Failing to Safeguard Your Estate Plans. It’s important to secure your Estate Plan so that your heirs can access it when needed. Consider storing it in a secure but accessible location instead of a safety deposit box. Keep all of your Estate Planning documents together in a safe place to ensure your heirs can find them easily.
• Failing to Keep Your Estate Plan Current. Regularly reviewing and revising your Estate Plan is crucial. Life changes such as marriage, divorce, and the birth or death of a family member can impact your plan, and it’s important to make necessary updates to avoid complications later on.

MAKE A PLAN THAT WORKS

We hope that in reading our Estate Planning for Dummies, you’ve got a list of questions longer than the ten we gave you in the article. If so, that’s great! We are here to help you figure out those answers.

At New York Legacy Lawyers, our New York estate planning lawyers understand how personal, and unique each estate plan needs to be. We know how intimidating the planning process can be when you’re facing it alone. It’s our mission to relieve any stress you may have about the planning process.

Reach out to us today using our contact us page or call us at (718) 713-8080, and let us tell you how we can help.

Estate Planning Checklist	Executor’s Responsibilities
Identify beneficiaries	Ensure beneficiaries receive designated assets
Determine distribution of assets	Follow instructions in the will for asset allocation
Appoint a guardian for minor children	Oversee the well-being and care of minor children
Designate an executor	Manage the administration of the estate
Create a trust (if applicable)	Administer the trust according to its terms
Prepare healthcare directives	Make healthcare decisions based on the individual’s wishes
Establish a power of attorney	Handle legal and financial matters on behalf of the individual
Secure digital asset information	Provide access to online accounts and digital assets
Review and update the estate plan regularly	Ensure the estate plan reflects current wishes and circumstances

https://yanafeldmanlaw.com/estate-planning-for-dummies-everything-you-need-to-know/
from New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/estate-planning-for-dummies-everything-you-need-to-know/