The topic of estate planning in Smithtown New York is mystifying to some people. They simply don’t know what it entails. In this post we would like to provide some basic information for those who may have no idea where to begin.
Part of the equation when you are planning your estate is the future transfer of your financial assets to your heirs. If you were to pass away without an estate plan your assets would be distributed to your closest blood relative or relatives under intestate succession rules.
This is probably not going to be consistent with what you would have wanted. Plus, there are other things to take into consideration like asset protection, estate tax efficiency, and other specialized concerns.
One way to leave behind your final wishes is to express them in a last will. Most people have heard of this document, and it is the most commonly utilized estate planning device.
However, you don’t have to use a last will to transfer your assets, and you may want to explore all of your options. One thing about a last will that many people don’t understand is the fact that your estate must be probated when you use a last will to direct asset distributions.
Probate is a legal process, and it can get lengthy. There are also significant expenses that can accumulate during probate. The time lag is very important for some families because inheritances are not distributed until the estate has been closed by the Surrogate’s Court. It can take months for the probate process to run its course even in simple cases.
A frequently used alternative to a last will is a revocable living trust. With these trusts you select a trustee and a beneficiary or beneficiaries. You convey monetary assets into the trust. You create a trust agreement that includes terms the trustee must follow after you pass away.
When you do in fact die the trustee distributes monetary assets to the beneficiaries according to your stated wishes. Because the property that you conveyed into the trust is not considered to be probate property the distributions of assets can take place in a timely manner, and the Surrogate’s Court is not involved.
Making sure that your assets are effectively transferred to your heirs is certainly part of the equation. An additional component would involve incapacity planning.
When you reach an advanced age you may become unable to make your own financial and medical decisions. To account for this contingency your estate plan should include a durable power of attorney. With this device you name someone to handle your financial affairs in the event of your incapacitation.
A health care proxy is also recommended. This is used to empower someone to make medical decisions in your behalf if it becomes necessary.