At The Law Offices of Kobrick & Moccia we understand how important a well thought out estate plan is to you. After all, a comprehensive estate plan should help grow your assets while you are alive, protect you and your assets while you are here, and provide for your loved ones when you are gone. Like most people, however, you may know very little about estate planning and how to create your own estate plan. The following questions and answers, therefore, may provide some additional information about estate planning tools and strategies and how can they can be used to create a successful estate plan that reflects your needs and wishes.
I don’t need to start my estate plan until I’m older, right?
This is a common misconception about estate planning. The truth is that estate planning should begin as soon as you are old enough to own assets – usually at age 18. While your estate plan will likely grow and expand throughout the years, everyone should have at least a basic Last Will and Testament in place as soon as they reach the age of majority. From that foundation you can add additional estate planning tools and strategies as both you and your estate grow. Find out why an estate plan is important here.
I was planning to wait until I amass my fortune to start my estate plan. Isn’t that what I should do?
If you are under the assumption that a modest estate does not justify an estate plan, you are not alone. In fact, one of the most common mistakes people make is to assume that only the wealthy need an estate plan. Nothing could be farther from the truth. Everyone should have an estate plan in place for several reasons. Your most precious assets are not measured in terms of monetary value. Your children, for example, are invaluable and your estate plan can protect them. Therefore, your monetary wealth shouldn’t dictate the need for an estate plan. Moreover, a comprehensive estate plan should include much more than just a roadmap for the distribution of estate assets when you die. Learn more.
Why can’t I use the “Do It Yourself” Last Will and Testament form I found online?
In today’s electronic age, it is tempting to rely on the internet for everything. You may even think that using a Do-It-Yourself estate planning form, such as a Will, is a great way to save time and money. Given the high likelihood that the Do-It-Yourself form you use will be defective in some way, however, there is a very good chance that your estate, and your loved ones, will end up spending far more time and money down the road litigating the mistakes in your Will than you saved by not working with an experienced estate planning attorney. Find out more about why using a Do-It-Yourself Will isn’t as good of an idea as it may sound and why you should avoid Do-It-Yourself legal forms in general.
What is a trust?
Trusts are an extremely common addition to the average estate plan. A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are divided into testamentary and living trusts with the former not activating until the death of the Settlor and the latter taking effect immediately after creation. Living trusts are further sub-divided into revocable and irrevocable living trusts. Learn more about trusts and how one might fit into your estate plan.
What is probate and why is it necessary?
Probate is the legal process that follows the death of an individual. Probate is used as a method to ensure that all the decedent’s assets are identified, accounted for, and valued as well as legally transferred to the new owners at the end of the probate process. Probate also serves to make sure estate taxes are paid and that creditors given the chance to file claims against the estate before assets are transferred. Learn more about the probate process here.
Do I need an incapacity plan?
Although most people prefer not to think about it, incapacity can occur to anyone at any time and for a wide variety of reasons. If you become incapacitated for any reason, who will step in and take over control of your assets? Who will be in charge of making medical decisions for you? Will your own wishes be honored with regard to end of life medical treatment should the worst occur? Incapacity planning answers those questions ahead of time by including tools and strategies in your estate plan that decide ahead of time who will control your assets and who will make healthcare decisions for you. An incapacity plan also allows you to decide ahead of time what type of treatment you will, and will not, consent to with regard to life sustaining or prolonging treatments. Learn more.
Do I need a Medicaid planning component in my estate plan?
The older you are the more likely it becomes that you will need long-term care at some point in your life. The cost of that care will run, on average, over $80,000 a year nationwide. In the State of North Dakota, however, you can expect to pay about $130,000 per year for long-term care. Most private health insurance plans will not cover the costs nor will Medicare, causing over half of all seniors to turn to Medicaid for help covering the expenses of long-term care. Qualifying for Medicaid, however, can be problematic because of the income and asset limits that cannot be surpassed by participants. By incorporating a Medicaid planning component into your overall estate plan you can protect your assets and ensure that you are eligible for benefits in the likely event you need to qualify down the road. Find out more here.
Do I need to worry about federal gift and estate taxes?
Federal gift and estate taxes are levied at the rate of 40 percent on the combined value of all qualifying gifts made during your lifetime and the value of assets owned by you at the time of your death. Fortunately, each taxpayer is entitled to exempt up to the lifetime exemption limit, set at $5 million but adjusted annually for inflation. For many people, however, even after the lifetime exemption is applied their estate remain at risk for incurring gift and estate taxes. You can minimize your estate’s exposure to gift and estate taxes though by careful and conscientious estate planning. Learn more.
Who Should I Appoint as the Executor of My Estate?
Do not make the common mistake of focusing all your time and energy making decisions regarding the disposition of your estate property in your Last Will and Testament and forgetting about another important decision you must make when creating your Will. The duties and responsibilities of an Executor, however, are numerous and varied and often call for a great deal of legal and financial acumen. How well your Executor performs those duties and responsibilities can directly impact the success or failure of the entire probate process, and, consequently, the success or failure of your estate plan. Learn more about the role of Executor and how to choose the right person for the job.
Contact a Long Island Estate Planning Attorney to Learn More
If you would like to discuss your estate plan, contact the New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.