Our Long Island inheritance planning attorneys assist clients that want to craft their legacies. Personalized attention is key, because each case is different, and there is no one-size-fits-all estate plan. This being stated, there is a basic framework that would apply to just about everyone, and we will take a look at it here.
Postmortem Asset Transfers
Clearly, the first order of business will be to arrange for the eventual transfer of your assets to your heirs. Many people assume that a last will is the right way to go if you do not have a very large, complicated estate. In some instances, a last will may be the best choice, but most people with any resources to speak of would do well to look at other options.
One major reason why you may want to consider an alternative to a last will is the matter of probate. This is a legal process that takes place under the supervision of a court. If you were to use a last will to state your final wishes, you would name an executor in the document to act as the estate administrator. The executor would be compelled to admit the will to probate.
This process is quite time-consuming; it will typically take at least nine months to run its course. No inheritances can be distributed while the probate process is underway. Plus, some considerable expenses can accumulate during probate. These would include court costs, legal expenses, the executor’s fee, appraisals, commissions, and other incidentals. All of this red ink reduces the value of the estate before it is passed along to the heirs.
These are a couple of the drawbacks, but there are others. Once you understand the pitfalls of probate, you can see why it may be beneficial to try to avoid it. This can be done through the utilization of a revocable living trust.
The anatomy of a living trust starts with the grantor, which is the person that establishes the trust. There is a trustee that serves as the trust administrator, and there are beneficiaries that can receive monetary distributions from the trust.
Many people are concerned about a surrender of control of their assets when they think about trusts. This should not be a concern when it comes to revocable living trust, because the grantor can act as the trustee and the beneficiary while he or she is still living. The ultimate level of control is the fact that the trust is in fact revocable. The grantor can dissolve the trust at any time and take back direct personal possession of the assets.
At the end the day, the purpose of the trust is to get assets into the hands of your loved ones after you are gone. To this end, you name a successor trustee to administer the trust after your passing. It can be someone that you know, but it can alternately be a professional fiduciary such as a trust company. Your heirs would be the successor beneficiaries.
When the time comes, the trustee would follow instructions that you record in the trust declaration. Your assets would be distributed to the beneficiaries in accordance with your wishes, and the probate court would have no involvement. This is one type of trust that can be used, but there are others that can be the right choice for people that have more complicated aims.
It is not the most pleasant thing in the world to contemplate, but many people become unable to handle their own affairs late in their lives. If you do nothing to prepare for possible incapacity, the state can be petitioned to appoint a guardian to act on your behalf. This individual may not be someone that you have chosen yourself, and your family members may disagree with regard to the person that should act as your guardian.
You can avoid this type of situation if you plan ahead effectively. When you are planning your estate, you can include a durable financial power of attorney to name someone to manage your financial affairs if you ever become incapacitated. A durable power of attorney for health care decision-making can be included as well.
Speaking of health care, the medical community can sometimes keep people alive indefinitely through the utilization of artificial means. This can be possible even when a patient is terminal. With a living will, you can state your life support preferences, and they will be honored if you are ever unable to communicate your decisions in real time.
Learn More About Estate Planning!
If you would like to learn more about estate planning, attend one of our upcoming seminars. They are free, and you can see the schedule and obtain registration information if you visit the seminar page on this website.