Articles Tagged with albany estate planning

Whether you are choosing an executor for your Last Will and Testament or a trustee for a trust you have established, it is clearly important to make the right decision. You want to choose someone trustworthy, responsible, and capable of carrying out the responsibilities being entrusted to them. That is often easier said than done, but the following tips adapted from the American Association of Retired Persons might be able to provide some guidance.

You Do Not Need an Expert

We all have a natural desire to want to work with the best when it comes to important matters. While experience in trusts and estates is beneficial, it is not required to properly and responsibly execute the duties associated with being an executor or trustee. Common sense can provide a solid foundation to perform these duties, and you may prefer a more intimate relationship with the person you are naming than you might get with a professional. In some situations, it may be best to choose a corporate trustee from an institution like a bank. However, many individuals can avoid doing this by selecting a reasonable person – which will also help you avoid the professional fee that may be associated with these services.

Among the many new trends emerging in a variety of places around the world is the idea of micro-living. The idea behind micro-living is to minimize the space you live in and consequently minimize associated costs, and potentially your impact on the environment. However, it is the reduction in cost that is most appealing to many people. Retirees are no exception to this, and a recent article from CNBC indicates that micro-living is becoming increasingly popular among elderly individuals looking to remain independent while minimizing their responsibilities and maximizing their savings potential.

Benefits of Micro-Living

Affectionately referred to in the article as “granny pods,” micro homes for senior citizens are typically several hundred square feet. This makes them small enough to fit in the backyards of most homes. These “granny pods” have all of the comforts of a normal home, just on a smaller scale. They allow senior citizens to maintain a sense of independence without having to actually move in with family or friends. This can be a welcome relief for both elderly individuals as well as their families that may not necessarily be looking to live together full-time. These micro homes typically have a bathroom, bedroom, kitchen, and potentially several other rooms depending on the size and experience you are looking for. They can be built to minimize obstacles that could be hazardous to older individuals, such as being built with flat floors to minimize the potential to trip or with modified showers to enable safer hygiene.

Nobody likes thinking about serious illness, especially a serious illness that could lead to death. Unfortunately, such illnesses can cause massive financial difficulties for friends and loved ones which can in turn significantly deplete the assets you had been planning to leave to your heirs. The moral of the story is that, no matter your age, it is never too early to start planning for the potential need for end-of-life care. The following tips are adapted from a recent article on this topic found in USA Today, and they may provide you with some important concepts to consider when thinking about healthcare issues.

Be Explicit About Your Wishes

Telling people in passing how you hope to be cared for in case of serious illness is important, but it isn’t necessarily always enough. It is important to write down your wishes and be explicit about how you wish your health care to be handled. You should also work with your estate planning attorney to create documents such as health care proxy nominations and/or a living will that express your healthcare wishes in detail.

Typically, many people tend to think an estate plan only includes your Will. In today’s day and age, however, most people have a much more diversified estate plan than they realize. Your estate plan is far more than just your Will and includes things like trusts, investments, retirement accounts, and insurance policies. One of the challenges of comprehensive estate planning can be understanding how these assets work and to whom they should go to. Recently, Forbes explored the way several assets within a typical estate plan usually work and understanding this could be an important part of your estate planning decisions.

Wills and Trusts

Those selected to benefit from assets distributed through a Will may have to wait a little longer than if you were to use a trust or other vehicle to distribute such assets. Wills are required to go through the probate process to prove that they are valid and to make sure they comply with the law. Typically, assets within a Will cannot be touched until the probate process is complete. While the probate process in New York is easier than elsewhere, it can still be time-consuming especially for an individual that may need immediate access to the assets in your Will.

Most individuals recognize the importance of comprehensive estate planning, although they may still choose to avoid it. One important part of your estate plan is your power of attorney (“POA”). Basically, a POA is a document that nominates an individual to make legal decisions for you in the event that you are unable to do so for yourself. You can choose the extent of the decision-making power you vest in the individual you have chosen by working together with an experienced estate planning attorney to determine how to best represent your goals. However, it is important to be aware of some of the pitfalls that could weaken your POA. According to a recent article from Forbes, the following tips may help you do just that.

Use an Experienced Estate Planning Attorney

Too many people decide to cut corners by using any number of online forms and legal information available for download. However, these forms are not tailored to a client’s individual needs, nor do they help you understand important aspects about making sure your POA and other estate planning documents meet the needs you have expressed. Designing your POA and other estate planning documents with an experienced estate planning attorney can help you make sure that your estate plan complies with the law. This can save you and your loved ones time, money, and stress down the line. With something as important as estate planning, you want to be sure that you

Once an individual decides to engage in comprehensive estate planning, several concerns may arise. One of those concerns often involves leaving a large sum of money to an heir that may be facing financial difficulty or may not yet have the ability to budget in a responsible manner. In such cases, individuals likely still want to make sure that the heir in question is financially provided for, but may have serious concerns over whether or not the heir is able to utilize an inheritance in a reasonable manner. In such cases, CNBC notes that increasingly popular IRA trusts might be the solution to helping you make sure that an heir’s inheritance accomplishes the goal you want it to meet.

Basics of an IRA Trust

An IRA, or individual retirement account, typically comes in one of two forms: a traditional IRA or a Roth IRA. There are different tax structures in place for both types of accounts, but regardless of the type you choose these retirement accounts can often grow to include sizeable amounts of money over time. As these accounts grow, it is increasingly important for you to ensure that your comprehensive estate planning strategy makes the best use of them.

We have written several aspects about the role IRAs can play in your comprehensive estate planning strategy, as well as several concerns that accompany them. Here, we will address the two common choices facing non-spousal individuals listed as heirs for an IRA account that is not slated to go to a trust for that individual heir. These two choices are to take a lump sum withdrawal or to keep the account invested. Each of these may have different consequences for an individual heir that are important for everyone to keep in mind.

Lump Sum Withdrawal

Non-spousal IRA heirs have the option to elect to make a lump sum withdrawal of the assets within the IRA. Choosing this option could be beneficial on several levels, such as enabling the heir to make use of a large sum of money for important large purchases like a house or renovations. It could also enable them to pay off otherwise crippling debts. However, inheriting a large sum of money all at once can carry complications, some of which are determined by the amount within the IRA as well as the type of IRA.

For most people going through estate planning, the goal is to pass on as many assets and as much wealth as possible. Most people don’t engage in estate planning with the goal of paying the most taxes possible or distributing assets to creditors. In fact, creditors can take a bigger chunk out of your assets than taxes can, so if you want to avoid costly claims during your lifetime and upon death that could significantly impact your estate it is important to take proactive steps to protect your assets from creditors as part of a comprehensive estate planning strategy.

In fact, there are several strategies that could help you save on taxes while keeping your assets secure from creditors, though it is important to make sure that whichever actions you choose comply with the Uniform Voidable Transactions Act that covers the transfer of assets in an attempt to defraud existing creditors. Some options for protecting your assets from creditors that comply with the provisions of this act might include:

Gifting

When people begin the process of estate planning or take time to review their existing estate plan, they have many tax considerations to think about. How they distribute their assets will determine what taxes, if any, will apply to their estate. They may consider creating a trust for their children, they might want to “gift” some of their assets to take advantage of evolving tax law, and/or they may choose to donate some of their assets to charity. If you are considering donating real estate to charity as part of your estate plan, it is important to be aware of the possible tax consequences doing so might have.

Charities vs. Foundations

Both public charities and private foundations can be nonprofit organizations if they have applied for and been granted 501(c)(3) status, which means that contributions to such organizations can qualify for tax deductions. However, when real estate is involved, the tax deduction for a donation can vary depending on what type of organization it is.

When you make the decision to see an experienced estate planning attorney to make a comprehensive estate plan to safeguard your assets and provide for your heirs, it can be a confusing process filled with a lot of legal terminology that might be new for most people. One of the biggest considerations in estate planning, and often one of the most confusing parts of it, is the effect taxes will have on an estate. To help you make the most informed decisions about what route you choose in planning your estate, it is important to have a full understanding of the different types of taxes that may come into play. One of those is known as the generation-skipping transfer tax, and the following information may be helpful in understanding it.

Life Estates

To fully understand the generation-skipping transfer tax, you first need to understand what a life estate is. A life estate is a type of estate in which ownership of real property – basically, a home and the land which accompanies it – is passed to another person and ends upon that person’s death. At that time, it may revert back to the original owner or it could pass along to someone else depending on the conditions you choose to set. In New York, life estates can be an easy way to ensure real property passes smoothly upon death without the need for probate. Life estates are also exempt from the federal estate tax. Usually, creating a life estate is a simple process, as is the transfer of property upon an owner’s death.

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