Most people understand the importance of having an estate plan in place. Despite this understanding, many people do not have one. One common explanation for the lack of an estate plan is that the thought of creating an estate plan is intimidating for the novice. This is certainly understandable given the fact that most things seem intimidating when you know nothing about them. One way to remove the intimidation barrier, therefore, is to learn more about estate planning. Toward that end, a New York estate planning lawyer has answered five common questions people have about estate planning:
- When should I start estate planning? One of the most common misconceptions when it comes to estate planning is the belief that you need to achieve a certain level of financial success or you need to be married with children before the need for an estate plan arises. The truth is that every adult should have at least a basic Last Will and Testament in place, if for no other reason that because it prevents the state from having the authority to decide what happens with your assets when you die. It is not necessary to have monetarily valuable assets for them to be important to you and for you to care about their disposition. Family heirlooms, for example, may have little financial value but may be emotionally invaluable.
What is incapacity planning? Another very important reason to have an estate plan in place without regard to the value of your estate or your marital status is that you could become incapacitated at any time. If that happens, someone will have to make personal and healthcare related decisions for you. Someone will also need to have the authority to control your assets during your incapacity. Absent a plan that appoints someone to these roles, a judge will be required to decide who to appoint. Consequently, you could end up with the last person you would ever choose in charge of making decisions for you and/or controlling your assets. Moreover, your loved ones could end up in a costly and contentious court battle over the right to make decisions for you during your incapacity.
Who should be the Executor of my Will? Do not do what many people do and simply appoint a spouse, friend, or parent without giving the matter any real thought. The Executor, who is appointed in your Will, has a long list of duties and responsibilities during the probate of your estate. The right Executor will contribute greatly to an efficient and expeditious estate administration. Conversely, the wrong Executor will contribute greatly to a costly estate administration, both in terms of time and money.
- Does my estate have to go through probate? All estates are required to go through some type of probate process to ensure that the estate assets are properly accounted for and transferred to the new owners, creditors of the estate given the opportunity to file claims, and taxes paid. Most states, however, also offer an alternative to formal probate for small estates. The State of New York, for example, allows you to use a Small Estate Affidavit if the decedent’s personal property does not exceed $30,000 in value and the estate meets all other requirements.
- It seems like everyone has a trust. Do I need one? A comprehensive estate plan typically includes a variety of estate planning tools and strategies beyond just a simple Last Will and Testament. By far, one of the most popular of those additions to an estate plan is a trust. Trusts are used so frequently, in part, because of their flexible nature. If you consult with an experience estate planning lawyer to determine if your estate could benefit from the addition of a trust, and then allow your attorney to draft the trust agreement, a trust could be an excellent addition to your comprehensive estate plan.
For more information, please download our FREE estate planning worksheet. If you have questions or concerns relating to estate planning, contact the experienced estate planning attorneys at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.