If you are like the average person, when you think about estate planning you focus on the need to create a roadmap for the distribution of your estate assets when you are gone. Distributing your estate assets is certainly a common estate planning goal; however, it should not be your only goal. On the contrary, a comprehensive estate plan should include a wide variety of additional estate planning goals and objectives. Exactly what those additional goals and objectives are is something only you can decide after consulting with your New York estate planning attorney. Fortunately, however, the Long Island estate planning attorneys at The Law Offices of Kobrick & Moccia have offered to discuss some of the most common estate planning components.
Distribution of Assets – Your Last Will and Testament Isn’t the Only Option
Most people equate a Last Will and Testament with the distribution of estate assets following the death of the Testator, or creator of the Will. A Will is frequently used to distribute estate assets; however, it is not the only estate planning tool that can accomplish this goal. A trust can also effectuate the transfer of estate assets following your death. Parents with minor children often use a testamentary trust in their Will as their primary distribution tool because a minor cannot inherit directly from the estate of a parent. A trust, however, can manage and protect assets until the child reaches the age of majority, providing financial support through trust distributions while the child is a minor.
Incapacity Planning – Who Takes Over if You Are Incapacitated?
While planning for your death is a primary goal of estate planning, planning for the possibility of your incapacity should also be a goal. Incapacity is not limited to seniors suffering from dementia. In fact, you have a one in five chance of suffering a period of incapacity that last for five months or more at some time during your working years. With each passing year, your odds of becoming incapacitated increase. If you do suffer a period of incapacity, are you prepared? Ask yourself: Who will make healthcare decisions for me? Who will make personal decisions for me? Who will take over control of my assets and bills? What happens to my children? Unless you have an incapacity plan in place, the answers to those questions may be decided by a judge after a lengthy, and costly, court battle involving loved ones and family.
Probate Avoidance and Funeral Planning – Making Things Easier for Loved Ones
Your loved ones will undoubtedly be grieving your loss following your death — not exactly the best time to have to make important, and costly, decisions. You can make it easier for them by planning ahead and including probate avoidance strategies in your estate plan and creating a funeral plan that only needs to be implemented. With careful planning, the bulk of your estate may be able to bypass the probate process altogether, allowing assets to transfer to the intended beneficiaries outside of the probate process. Although you may prefer not to spend much time contemplating your own death and subsequent funeral, by adding a funeral planning component to your estate plan, doing so also ensures that your wishes with regard to the disposition of your body and the type of service you want will be honored.
Taxes, Taxes, Taxes – Don’t Forget Uncle Sam!
All estates are potentially subject to federal gift and estate taxes upon the death of the estate owner. At the rate of 40 percent, federal estate taxes can quickly result in the loss of a significant portion of your estate assets if you failed to plan ahead by incorporating tax avoidance strategies into your comprehensive estate plan.
Long-Term Care Planning – Will You Need to Qualify for Medicaid?
When you enter your “Golden Years’ you will stand a 50 percent chance of needing long-term care (LTC) before your death. Each passing year that chance increases, as does the cost of that care. At an average yearly cost of over $144,000 now, imagine what it will cost when the time comes that you need LTC! Like over half of all seniors in nursing homes, you may need to seek assistance paying long-term care expenses from the Medicaid program. If you failed to plan ahead by including a Medicaid planning component into your estate plan, however, you may not qualify without putting your hard-earned assets at risk.
Contact Our Long Island Estate Planning Attorneys
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about estate planning and/or the various components you may wish to add to your plan, contact an experienced estate planning attorney at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.
- “Last Will and Testament” Origin - April 1, 2021
- Do I Need a “Durable” Power of Attorney? - April 2, 2020
- Joint Tenancy Pros and Cons - March 31, 2020