For the average person, estate planning is somewhat mysterious and often intimidating. Most people recognize the need to create an estate plan; however, those same people often don’t know when to get started, what should be included in the plan, or where to turn to for help. If you are one of those people, take comfort in knowing that you are hardly alone. Because we realize that most people have questions about the concept of estate planning, the Long Island estate planning attorneys at the Law Offices of Kobrick & Moccia have prepared answers to five of the most frequently asked estate planning questions.
- I don’t have a large estate at this point so I don’t really need an estate plan yet, right? This is a very common misconception about the need for an estate plan. People frequently think they need to have amassed a large fortune or be married with children before the need for an estate plan arises. The truth, however, is that every adult should have at least a basic estate plan in place. Although you may not have acquired numerous valuable assets yet, the assets you do own probably mean something to you and if you don’t want the State of New York deciding what happens to them after your death, you need an estate plan in place to prevent that from happening.
- I have heard that I should try and avoid probate. How can I do that? Probate avoidance is a common estate planning goal because formal probate can be costly, both in terms of time and money. The key to avoiding probate, or at least minimizing the time your estate spends in probate, is to minimize the number and value of the probate assets left in your estate at the time of your death. The reason for this is simple — non-probate assets bypass the probate process altogether. Common examples of non-probate assets include:
- Assets held in a trust
- Life insurance proceeds
- Assets held in an account designated as “payable on death (POD)” or “transfer on death (TOD)”
- Certain types of jointly held property
- Funds held in many types of retirement plan or pension plans
- How do I make sure my minor children are protected and provided for in my estate plan? Minors cannot inherit directly from anyone. If you are married, you may simply leave your entire estate to your spouse to hold and manage for your children until they reach the age of majority. If you are unmarried, however, or you do not want your spouse to have control over your children’s inheritance for any reason, a trust may be the best option. A trust allows you to name anyone you want as the Trustee who will manage and invest the trust assets and administer the trust terms. Your children can benefit from the trust assets while they are minors as well as received staggered disbursements of the remaining assets once they reach adulthood.
- I have heard that incapacity planning is important. Do I need to consider my own incapacity in my estate plan even though I am still young? I common mistake is assuming that incapacity only occurs to the elderly. The reality is that incapacity can strike anyone at any time. In fact, you have about one in five chance of suffering a period of incapacity lasting five months or longer before you reach retirement age. Including an incapacity planning component in your comprehensive estate plan is the best way to plan for the possibility of your own incapacity. Within that component you may decide to create a revocable living trust that is often used as an incapacity planning tool to shift control of your assets to the person of your choice if incapacity strikes. You may also include advanced directives that address your medical care in the event of your incapacity.
- How often should I update my estate plan? As a matter of course, you should review your estate plan every three to five years during your working years and every five to eight years during your retirement years. Certain life events, however, call for an immediate update of your plan because of the impact the event has on your life. If you get married or divorced, have a child, or move to another state, for example, you will need to update your plan right away.
Contact Long Island Estate Planning Attorneys
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about Long Island estate planning, contact the experienced Long Island estate planning attorneys at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.