Essential Estate Planning
Estate planning is critical for everyone, regardless of what a person owns. Estate planning can be confusing – so much so that it is easy to become overwhelmed and put it off, sometimes indefinitely. But planning your estate today is essential to ensure that your children and family members are protected and that your wishes are carried out in the event of a sudden and unexpected death, incapacity or long-term illness.
At Piede Law LLP, the client is the center of every legal representation. We generally charge flat fees so you don’t receive any surprise bills in the mail. And we welcome questions. It is important that you both understand your estate plan and feel confident that you have the right plan for your unique circumstances. You want to know that you have done everything possible to ensure the wellbeing of yourself and your family.
To ensure your continued satisfaction with your estate plan, every three years years we will invite you back to review your plan. As what you own is bound to change over time, as are your family circumstances and the law, it is important that we stay on top of any changes and quickly incorporate them into your planning.
Where to Start: A Will or Living Trust?
A will is a written instruction to a probate court that details how your assets are to be distributed upon your death, and is the traditional way to leave assets to your children and loved ones. Most people equate estate planning with having a will, and for some people, a will is the best place to start. But wills can also create unintended issues, including probate.
Probate is a court-supervised process that ensures your estate does not owe money to creditors. It is designed to transfer your remaining assets to your beneficiaries in an orderly way. Probate can be lengthy and also means that the value of your estate will become public information, along with the names of your beneficiaries, creditors, and natural heirs.
Settling your estate through probate will require an executor, and if you do not appoint one in a will, a court will appoint one for you. Your assets will need to be accounted for, and any claims made by creditors may hold up the process as well. Also, before beneficiaries can receive anything under a will, tax returns must be filed. In total, this process can take a year and often longer.
Not all estates have to pass through probate. In New York, estates of less than about $30,000 can take advantage of a simplified estate administration procedure, called “voluntary administration.” But that $30,000 must not be real estate and must be unrestricted by debt. For that reason, no one who owns a home in Rochester will qualify for this simplified administration procedure.
If someone owns more than $30,000, he can avoid probate through a fully-funded lifetime trust. There are also other ways to avoid probate, such as joint ownership or life estates with survivor interests, but each of these techniques has serious drawbacks.
Placing your assets in a lifetime trust can help minimize probate after your death. Lifetime trusts act a substitutes for wills, and provide instructions on how your assets are to be managed during your lifetime and after your death.
For a lifetime trust to operate properly, it must be funded during your lifetime. You would typically be named as the trustee. If it is done properly (which is simple with good coaching), your assets will be distributed to your intended beneficiaries without court involvement. You retain the right to amend or revoke the trust at any time and to appoint or remove trustees of your choosing. If you specify, trustees must consult with your before buying or selling assets. Additionally, the trust does not need to file a separate income tax return until after your death.
Because estate planning law is complex and is constantly changing, and because of the importance of taking into consideration the implications of long-term care, it is best to work with a qualified estate planning attorney who is also versed in elder law when putting your plan in place. Titling the assets properly into the name of the lifetime trust is essential in order for your plan to work to its greatest advantage.
To schedule a confidential consultation to discuss you estate planning options, please contact an attorney experienced in estate planning at Piede Sun LLP.