New York Estate Planning & Elder Law Blog
Considering that someday you will no longer be alive is an unpleasant thought. You might be frightened of the unknown, particularly when it involves issues of what will happen to your loved ones. Even though you will no longer be around to play a role in managing your estate, you do have an input in what happens to your estate after you pass away. This article reviews some of the helpful things that you can do to protect your money after you pass away.
A vital part of estate planning is creating a will, which is a type of legally-binding document that articulates your wishes for what should happen after you pass away including who you would like to manage your estate and how you want your assets to be divided. Wills can also include instructions regarding the care of any dependent or pets that you might have.
A poll conducted in 2021 revealed that less than half of the adults in the United States have a will. The results of this study are similar to other polls conducted as early as the 1990s. Even though it can be challenging to consider that you will someday pass away and to place instructions regarding how your family should manage your assets, doing this can be critical to making sure that your assets, as well as your loved ones, remain protected after you pass away.
Not creating a will can mean that a probate court ultimately decides what to do with your estate and that someone other than who you desire ends up receiving your assets. Failing to create a will can also mean that your loved ones must wait longer for a resolution of your estate.
# 1 – Inform Your Loved Ones
Informing your loved ones about what to anticipate from your estate after you pass away does not guarantee that your wishes will be met. Unless you appropriately designate people and assets, a substantial risk exists that your wishes will not be satisfied. To avoid these complications and to make sure that your assets are passed on to the people you intend, you should make sure to appoint beneficiaries for all of your assets and to routinely review accounts to make sure your wishes remain appropriate.
# 2 – Utilize Transfer on Death Deeds
New York state utilizes transfer on death deeds, which transfer assets to your loved ones following your death. These deeds let you pass on titles to assets under a grantee-beneficiary at death without any need for assets to pass through probate.
# 3 – Consider Appointing A Trustee
Many people worry about what their loved ones will do with assets after the person passes away. Some people worry about particular family members, who might have poor money management skills. One of the best ways to protect your assets is a trust. You can select a trustee who will distribute your assets as they deem appropriate and assets within a trust are not subject to estate taxes. Remember, after assets are placed in a trust, they are no longer considered to be owned by you. Establishing trusts is a complex task, especially if several assets are involved.
# 4 – Gift Assets
If your assets are subject to significant taxes that could leave your loved ones facing less than you would have liked, you should consider gifting them assets while you are still alive. Currently, in the United States, a person can gift one individual up to $15,000 a year without being subject to taxes. If you plan on gifting assets in such a way, you should not forget about asset appreciation. Based on when you pass on the gift, your loved ones might be required to pay on the value if it is adjusted after your death and is greater than the threshold for taxes of $15,000.