Estate Planning
ESTATE PLANNING OVERVIEW
If you think estate planning is only for the very rich, you're wrong. Certainly larger estates are subject to large taxes, but taxes are only one reason for estate planning. Here are seven more, some of which may be more important to you:
1. Plan who receives what size share of your assets.
2. Decide how and when your beneficiaries will receive their inheritance or income.
3. Decide who will manage your estate (executor, trustee, etc.) and be responsible for distribution of the assets.
4. Reduce estate administrative expenses and delays.
5. Select a guardian for your children.
6. Provide financial management for funds that may pass to grandchildren.
7. Provide for the orderly continuance or sale of a family business or investment real estate property.
If you don't have a plan, state laws will determine who inherits your assets and when they receive them. The court will appoint a guardian for your children and the administrator for your estate. Your estate could wind up paying a substantial amount of unnecessary taxes and administrative costs,
WHAT ABOUT TAXES?
Settlement expenses and probate costs are an important aspect of estate planning. So are federal and state taxes. While taxes aren't the only estate planning consideration, because they can be so expensive, they are an important one. If your taxable estate exceeds $625,000, your estate is subject to marginal tax federal rates starting at 37% and going as high as 55%. A $2 million taxable estate would be subject to estate taxes of close to $600,000. After 1998, the minimum subject to federal estate taxes is scheduled for small annual adjustments.
The size of your estate is increased by the death benefit of all life insurance you own as well as any court settlements payable as part of a "wrongful death" action.
Planning your estate is about caring for your loved ones, seeing that they are provided for, and making sure your hard earned property is distributed according to your wishes. Your estate consists of all your property including:
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Your business, your home, and other real estate,
- Tangible personal property such as cars and furniture, and
- Intangible property like insurance, bank accounts, stocks, bonds, pension & social security benefits.
An estate plan is your mapping of where you want your property to go after you die.
Not Just For The Older Generation
To many young and middle-aged people die, without warning, often leaving spouse and minor children who need care and direction. Estate planning should be part of your overall financial plan, along with your children's college tuition and your retirement needs. If your circumstances change, it's easy & inexpensive to adjust plans.
What Happens If You Do Not Plan?
If you die without a will or trust, you have in effect left it to your states law to write your will for you. That means the state will make certain assumption about where you would like your money to go to (with which you might not agree). Some of your hard earned money might end up with people who do not need it.
Meanwhile others who might need money more; or who are more deserving, could be shortchanged. Surviving relatives may squabble over who gets particular items of your property, since you did not, make the decisions before death.
Ten Things An Estate Planner Can Do For You
- Provide for your immediate family
Couples want to provide enough money for their surviving spouse. Couples with children want to assure their education & upbringing. If you have children under 18, both you & your spouse should have a will nominating personal guardians for the children, in case you both should die before, they grow up. Otherwise, a Court will decide without your imput where your kids will live and who will make important decisions about their money, education,& way of life.
- Get your property to beneficiaries quickly
Options include insurance paid directly to beneficiaries, joint tenancy, personal residence trust, & living trusts, as well as using simplified or expedited probate & taking advantage of laws that provide partial payments to beneficiaries while will is in probate.
- Plan for incapacity
During estate planning you can also plan for possible mental or physical incapacity. Living wills & durable healthcare powers of attorney enable you to make decisions about life support & pick someone to make your medical treatment choices.
- Minimize expenses
Good estate planning can keep the cost of transferring property to beneficiaries as low as possible leaving more money for beneficiaries.
- Choosing executors / trustees for estate
Choosing competent executors/ trustees & giving them the necessary authority will save money, reduce the burden on your survivors, & simplify estate administration. We provide services in this area.
- Ease the strain on your family
You can take burden from your grieving survivors & plan your funeral arrangement when planning your estate. You may want to simply limit the expense of your burial or designate its place.
- Help a favorite cause
Your estate plan can help support religious, educational & other charitable causes, either during your lifetime or upon your death, & at the same time take advantage of tax laws designed to encourage private philanthropy.
- Reduce tax on your estate
Every dollar your estate pays in estate or inheritance taxes is a dollar that your beneficiaries will not receive. A good estate plan can give the maximum allowed by law to your beneficiaries & the minimum to the government.
- Provide for people who need help & guidance
Do you have an elderly parent or disabled child, or grandchild whose education or health you want to assure. You could establish a special trust fund for family members who need support that you will not be there to provide.
- Make sure your business goes on smoothly
If you have a small business, you can provide for an orderly succession & continuation of its affairs by spelling out what will happen to business. By using family trusts you can still control your assets & at the same time transfer appreciated property to the next generation.
By our valuing your business you can take advantage of valuation discounts thus reducing your taxable estate by 35 - 45%.
We do all of the Estate Planning and prepare will and all necessary trust documents.
THE ABOVE IMFORMATION FOCUSES ON BROAD LEGAL PRINCIPLES, AND THE INFORMATION PROVIDED SHOULD NOT BE ACTED ON WITHOUT PROFESSIONAL ADVICE. MAKE SURE THE PROFESSIONAL YOU USE IS THROROUGHLY FAMILIAR WITH THE LAW IN YOUR STATE.
Living Wills and health-care Proxies
What is a health-care proxy?
Under New York law, an individual may appoint someone she trusts E.g. a family member or close friend to decide about treatment if she loses ability to decide for herself. She can do this by using a health-care proxy in which she appoint a health care agent to make sure that health-care providers follow her wishes. Her agent can also decide how her wishes apply as her medical condition changes. Hospitals, nursing homes, doctors and other health-care professionals must follow the agent's decisions as if they were the patient's. The individual can give her health-care agent as little or as much authority as she wants. She can allow the agent to decide about all health-care or only certain treatments. To properly protect patient who does not want to be kept alive by machine you must include both a "Do Not Resuscitate" and a "Do Not Intervene" order in all Powers and Living Wills. You must have multiple copies of this document e.g. Patient going to hospital by ambulance. Without DNI, patient could be put on machines and may not be able to be taken off.
What is the difference between a living will and health-care proxy?.
A Living Will is a written statement of an individual's wishes regarding medical treatment. The statement is to be followed if an individual is unable to provide instructions at time medical decisions need to be made. Health-Care proxy is significantly different from Living-Will in that it empowers another person (agent) to make health decisions if patient cannot do so herself/himself. Living-Will on the other hand, has no such provision but enables a person to express his/her own choices regarding medical treatment. It makes sense to utilize both a Living-Will and a Health-Care proxy.
Can the health-care agent be legally or financially liable for health-care decisions made on your behalf?
No. A Health-Care agent will not be liable for treatment decisions made in good faith. The agent cannot be held liable for costs of care just because she/he is an agent.
Do you have to write an advance directive?
No. Signing a Living-Will or Health-Care proxy is voluntary. No one can require an individual to complete documents
Guardianship - A Valuable Legal Tool
In 1993, NYS enacted a new guardianship statute know as Article 81 of the Mental Hygiene Law. The new law set aside the former system of conservatorships and committees. Under Article 81 a court may appoint a guardian for a person whenever it finds by "clear and convincing" evidence that alleged incapacitated person, the "AIP" (1) cannot adequately understand and appreciate nature and consequences of his/her particular limitations and (2) is likely to suffer harm because of these limitations and inability to appreciate consequences. A guardian is a person appointed by Court who receives authority from Court to make certain personal care decisions and/or property and financial mgt. decisions for AIP for a period of time found by Court to be necessary to meet a person's needs. Powers of guardian are specifically limited to those necessary to meet needs of the AIP. A guardian may be an individual of 18 years of age or a parent under 18 years of age and certain public agencies and not-for-profit corporations.
Statute provides that guardian's authority should be tailored to satisfy specific personal and/or property management needs of AIP making available least restrictive form of intervention. In contrast to the old guardianship law under Articles 78 and 81 of the Mental Hygiene Law, the new statute permits AIP as much latitude as possible under circumstances for exercise of independence and self-determination. Guardianship proceeding may be commenced by alleged incapacitated person or a person with whom that person resides, relatives, a trustee of a trust established by and/or for benefit of a person and in fact, any individual who is concerned about welfare of person alleged to be incapacitated.
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