New York Estate Planning & Elder Law Blog
Aside from federal and state tax, estate planning is a vital process for anyone seeking a risk-free future for they family. Without formation of a will, estate, or trust, assets are distributed pursuant to state law in the jurisdiction of residence of the decedent. The estate planning process ensures that a surviving spouse, children, and other named beneficiaries are in receipt of valuable assets according to a decedent’s wishes when state laws are inadequate. Here are ten essential reasons estate planning should be part of your retirement strategy.
- Financial Control
A constructive priority, estate planning offers enhanced financial control. Taxation also falls under this general framework of fiscal responsibility and reporting accountability. Control, the exercise of financial accounting management, enables an estate owner to dictate how assets will be transferred, held, and distributed during their life, and upon death. A testamentary document such as a will or estate document, established during a decedent’s life, is a written directive that provides a Trustee or Executor instructions for distribution of estate or trust assets to named beneficiaries.
- Issues of Non-disclosure
When a person dies, it is usually impossible to maintain discretion during the probate process. An estate plan allows beneficiaries to avoid probate after a decedent has passed, and protects the privacy of information related assets, transactions and those heirs that would otherwise be available to the public. An estate plan can also be drafted to separate communications with beneficiaries; prohibiting disclosure of asset distribution. This also allows for designation of a charitable beneficiary without disclosure to heirs or other named beneficiaries.
- Incapacity of Parties
Durable power of attorney and advance health care directives written into a living will and health care proxy, will ensure that management of estate assets continues in the event of disability or mental incapacity of a decedent or their beneficiaries.
- Business Succession
The optimal estate planning scenario where business succession planning is concerned, is at the outset. Inclusion of business succession planning in an estate plan permits a family business to continue uninterrupted at the time of a owner’s death.
- Creditor Attachment
A “self-settled asset protection trust” protects assets from creditor attachment of an estate owner’s assets and their heirs for the purposes of paying off debt. For example, ERISA-qualified pension fund asset transfers to an estate have a lower risk of seizure than before. Without the protection of an estate or trust, inherited assets can be availed to pay any creditors during the probate proceeding; the source of excessive delay and sometime losses.
- Supplemental Needs
The option of forming a “supplemental needs trust” for a beneficiary receiving public assistance as result of disability or age-related reasons protects the person who might otherwise be disqualified from receiving Medicaid or other public benefits in the future.
- Substance Abuse/Spendthrift
Estate planning eliminates the risk that a family member with a substance abuse or gambling addiction wastes valuable assets intended for other beneficiaries. Similarly, an estate, trust, or will prohibits a spendthrift to arbitrarily restrain or delay distribution of assets based on personal budgetary criteria not laid forth by the decedent.
- Second Family
Remarried divorcees and widows have an opportunity to account for second family beneficiaries during the estate planning process. The law of intestacy applied in most states, automatically assigns assets to surviving spouses and children. Stepchildren are generally excluded from rules of intestate succession.
- Family Pets
Pet owners have the option of providing for their pet within an estate plan. An estate owner can specify provisions for pets within the instructions of a testamentary document.
- Trust Administration
Appointment of a trustee to administer an estate or trust can be done by the estate holder, or a trust advisor who is also responsible for modification of governing laws and allocating powers to beneficiaries’ interest in the trust. By planning an estate or trust in advance, a trust advisor can be elected to represent the interests of the estate owner throughout the life of the trust.
New York Estate Law Firm
Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate planning matter.
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