Articles Posted in Estate Planning

One of the most difficult parts about successful estate planning is that countless myths persist about how to plan for your future. One of these misconceptions is that young people do not need estate plans. Another common misconception is that once you create an estate plan, there is no need to revise. In reality, the best approach is to create an estate plan early on in life and then to revise or add to that estate plan as time passes. This is because, like or not, emergencies do happen and everyone can benefit from the existence of an estate plan. As a result, this article reviews what a good estate plan should include for some various ages as well as the risks presented to estate plans during each phase of a person’s life. 

# 1 – College Age

While you still need one, during this phase of life your estate plan can remain relatively simple and include only critical documents like durable powers of attorney and a will. Each year, countless young people end up in tragic accidents that force their parents or loved ones to make caregiving decisions. Having a power of attorney in place helps to avoid uncertainties about how healthcare or financial decisions for you will be made. Regardless of value, if you have any assets, you should also address how these belongings will be transferred in a will. 

The estate tax in the United States is a tax placed on a person’s assets that transferred to beneficiaries after that person’s death. While only a certain category of assets is impacted by these taxes, they can have a profound impact on the administration of your estate plan.  As a result, if you plan on engaging in estate planning any time soon, this article reviews some critical factors that you should consider the role of estate and gift taxes in the United States as of 2020. 

# 1 – The Lifetime Exemption Amount

Estate taxes in this country impact only the highest-earning households in this country. This is because federal tax laws acknowledge a lifetime exemption, which allows you to exempt certain assets from what constitutes a taxable estate. While the amount of this exemption change yearly, in 2020 the lifetime exemption is $11.58 million for each person. This means that the exemption for married couples is $23.16 million. Any amount that goes over these thresholds is subject to an inheritance tax. 

Under the Uniform Parentage Act as well as New York law, children born through the aid of advanced reproductive technology are treated the same as biological children.

Children who are born through the use of frozen biological material, however, create many estate planning questions, which include how to write estate planning documents and how to structure trusts. 

Know What Federal and New York Law States

While we create estate plans to make sure that our wishes are carried out after our death or incapacity, we ultimately establish these plans for our loved ones.  There are various reasons, however, why many people hesitate to create any type of estate plan at all. For one, it can be frightening to confront the fact that like everyone else, you too will one day pass away. Uneasiness about this prospect can cause you to end up delaying the creation of an estate plan for years and sometimes even permanently. 

One of the best ways to motivate yourself to take the steps necessary to create plans for your future is to understand why your loved ones want you to do so. As a result, this article reviews some of the most common reasons why family members and other loved ones want us to create estate planning documents.

# 1 – Avoid Complications

It’s a common tactic for families to utilize trusts to both own, control, and transfer ownership of family businesses. Among other reasons, these trusts help to achieve goals related to asset protection, tax savings, and estate planning. 

If your family-run business is also a government contractor, it is critical that you be aware of the Federal Acquisition Regulation. Not complying with this body of law could result in various complications include allegations of making false statements, losing applicable clearance, and having bids and proposals rejected.

The Role of CAGE Codes

It’s easy to assume that celebrities have the best-written estate plans. In reality, however, each year countless celebrities pass away and create estate problems because they do not clearly express their wishes. 

For example, when the “queen of soul music” Aretha Franklin passed away, she left a holographic will behind. While some news sources first reported that Franklin had passed away without any type of estate plan, she was later discovered to have left behind a holographic will. This means that instead of administering Franklin’s estate following state intestacy law, Franklin’s estate was divided under the terms of her handwritten will.

When New York Holographic Wills Are Valid

In the recent case of Leland House v. Webb, a husband initiated legal action against his deceased wife’s executor to quiet title of a property parcel. In response, the executor claimed that the transfer of the property was a gift rather than a sale. After the trial court ruled in favor of the executor, the husband appealed. 

The appeals court found that an aunt had conveyed the parcel to the wife during the wife’s marriage to the husband.  

How property is characterized is often shaped by the time and method through which the parcel was obtained. Among the types of property ownership, there is a presumption in most states that property owned by spouses during a marriage is marital property. If the property is obtained through a gift or inheritance, however, it is often classified as separate rather than community property. 

While most of us are familiar with wills, many people in New York are not certain about the role played by other estate planning tools like guardianships. In short, a guardian refers to a person who makes decisions for another individual, who is not able to make decisions on their own. 

Guardianship is appointed for children, adults faced with development or intellectual disabilities, or incapacitated adults. In the state of New York, there are several types of guardianships, which vary based on the parties who are involved. This article briefly distinguishes the differences between these types of guardianship.

# 1 – Guardian of a Developmentally or Intellectually Disabled Adult

Many estate planning strategies can be utilized to achieve your goals. One of the most common techniques that people utilize to achieve tax and asset management goals is placing assets into a trust, but there are many complexities about how trusts operate. Among the various options for funding a trust, you might have heard about having any remaining assets from your will placed into a trust.

The Role of Pour-Over Wills

Establishing a pour-over will requires a person to establish both a will and a trust. Language within the will should then state that all or some of a person’s assets pass into or “pour-over” into the trust once that person passes away. Assets that are placed in the trust are then used to fund distributions to beneficiaries. If all of your assets are passed to the trust, your estate will not be required to pass through probate court.

Regardless of whether you’re an estate representative, executor, or have any other connection to an estate being administered, it is common to wonder how long the estate asset distribution process will take. In reality, there is no fixed amount of time that estate distribution takes. Instead, this amount varies between estates based on various factors. While some people discover the probate process takes several months, other people find out that the estate administration process takes up to six months.

Why the Probate Process Takes Time

In short, the probate process can take a long time because it involves numerous steps. A person’s estate will be required to pass through probate if that person’s assets have more than a certain value or if the estate includes certain types of assets.