Estate planning can be a bit intimidating for the uninitiated. After all, most of the terms and concepts used in an estate plan are things you will not likely encounter anywhere else. Consequently, people often put off creating their initial estate plan because they are not sure where to begin and/or because the entire concept is intimidating. The best way to get past the intimidation factor is to simply sit down with an experienced New York estate planning attorney and discuss your estate planning needs and objectives. In the meantime, however, the Nassau County estate planning attorneys at Law Offices of Kobrick & Moccia have provided answers to five common estate planning questions for you.
- When do I need to start estate planning? One of the most commonly asked questions and most misunderstood. People often believe that they need to have a large and/or valuable estate before estate planning becomes necessary. The truth, however, is that every adult can benefit from having an estate plan in place. In the absence of at least a basic Last Will and Testament, for instance, the State of New York will decide how your estate is distributed should you meet an untimely death. This means that only very close relatives will inherit from your estate. Friends, charities, and more distant relatives will receive nothing, despite your wishes to the contrary.
- Do I need a trust? Although a Last Will and Testament usually provides the foundation for an estate plan, trusts are a very common secondary estate planning tool. Today, there is a specialized trust for almost any estate planning goal or objective. Trusts are first divided into testamentary and living trusts. A testamentary trust does not activate until your death and is commonly used by parents with minor children who cannot inherit directly from the estate. Living trusts activate immediately and can be further divided into revocable and irrevocable trusts. A living trust can accomplish a wide variety of estate planning goals, such as incapacity planning, asset protection, or Medicaid planning. The best way to decide which type of trust is right for you is to consult with an experienced estate planning attorney.
- How do I choose fiduciary roles in my estate plan? There are several important fiduciary roles in the average estate plan, including an Executor and/or Trustee. Do not make the common mistake of simply appointing a spouse, family member, or friend to a fiduciary role just because you feel obligated to do so. Instead, take the time to find out what the position entails and then appoint the right person to the position. Appointing the wrong person to a fiduciary role could cost you and/or your loved ones a considerable amount of time and money down the road. Conversely, appointing the right person will result in an efficient and successful estate plan.
- When should I update my estate plan? Creating an initial estate plan is an important step toward protecting you, your assets, and your loved ones; however, if you fail to update that plan when necessary the plan’s usefulness decreases significantly. In fact, an out of date estate plan can be your worst nightmare when it comes to probating your estate. As a general rule, you should review your plan as a matter of routine every three to five years during your working years. After you retire, you can move to every five to eight years. Certain life events, however, will call for an immediate review, including divorce, marriage, or the birth of a child.
- What components should be in my estate plan? There are no hard and fast rules with regard to which components you will need in your estate plan. Instead, the components you include in your plan will depend on your estate planning needs and objectives. Some common estate planning components, however, include incapacity planning, asset protection, probate avoidance, and tax planning.
For more information about estate planning, download our FREE estate planning worksheet. If you have questions or concerns about estate planning, or you are ready to get started on your plan, contact an experienced New York State estate planning and elder law attorney at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.