You may want to Consider one or more of the following cases and see if you fit into these categories; you own and manage one or more businesses, you have minor children or you don’t have any children, you have a disabled family member, or you have one or more health issues, you are married, divorced or in a second marriage etc.
You are definitely in of the categories mentioned above, any of these above mentioned cases requires you make plans, estate plans. Consequentially, you need estate planning documents to ensure the validity of your plans. Contact an estate planning attorney near you today to document your plans.
The importance of Will and Trust
Wills and trusts are estate planning tools which may or may not be needed simultaneously in an estate plan, and this is dependent on your wishes for your estate. If you wish to transfer all your assets into the ownership of a loved one without having it go public, you should consider opting for a trust, as this would ultimately aid your cause. However, as good as this sounds, a trust once created, will remove every assets transferred into the trust from your ownership. Hence, you would not be able to use the capital in a bank account which you’ve transferred into the trust, until that trust is revoked (cancelled). The bad news is that not all trusts are revocable. If this is a major source of worry for you, then you should distribute your assets using a will instead, but even this has its own downsides. Now, it’s time to go into more details about each of these estate planning documents.
Prepare a Will
A will is an estate planning document which clearly expresses the wishes of the testator (i.e. the creator of the will) regarding the disposal of his or her assets after passing away. The testator may wish for his company to go to his first son, while his house go to the spouse, $5,000 to his friend or relative, and so on, and these wishes must be concisely spelt out in the will to avoid ambiguity.
Basically, you should spell out in your will how you want your estate distributed to your loved ones when you pass away. You can also name a guardian who would take care of your minors when you pass away. In addition, you must name an executor who will ensure that your wishes are carried out, and the names of the beneficiaries.
What happens to my will when I pass away?
You will must be probated in a Surrogate’s Court in New York where you lived and/or owned assets, and this brings publicity upon your will. Many people do not like this publicity, which is one reason why many create Trusts. In addition, probate and court fees as well as estate taxes must be paid during probate, and this is one of the major downsides to a will. Worst case scenario is if your will doesn’t meet all requirements. Then, your will be discarded and your estate distributed according to NY intestate laws.
Do you need a living trust?
A trust is an agreement between two parties — the trust maker and the trustee — for the trustee to hold and manage the trustor’s property on behalf of a third party, the beneficiary. When you create a trust, you have to fund it by transferring funds or assets into that trust. Whatever assets you transfer are removed from your name and would now belong to the trust, and you would not be entitled to directly benefit from it. However, you still retain a level of control by laying down instructions on how the trust assets will be managed by the trustee.
People create trusts mostly because it avoids probate, publicity and other estate fees that comes with it. Once the trust maker passes away, the trust assets are passed on directly to the beneficiary without attracting any fees. A trust may also be used when you become incapacitated, as your assets will now be managed by the trustee who is bound to follow your instructions.
However, creating a trust is more expensive than creating a will and depending on the kind of trust, you may not be able to use the trust assets till death. Such kinds of trusts are known as irrevocable trusts. There are also revocable trusts which you can change at any time, for example a living trust. If this worries you, you should note that you are at liberty to transfer only a few of your assets into the trust, and then create a will which would handle the distribution of your other assets at your death. Such a will is known as a “pour-over” will.
Contact an estate planning attorney near you today.