What To Do When Planning Your Estate

Do you need legal help and want to know what to do when planning your estate? Check out this article, then call our Buffalo attorneys today.

1) Understanding Estate Planning

  • What To Do When Planning Your EstateSuccessful estate planning requires an understanding of the differences among people’s concerns and goals. Essentially, people simply want to dispose of their assets and resolve any outstanding issues. Most people should have a will to clearly state who will handle your affairs and how assets will be distributed.
  • Three basic documents, or estate planning techniques, are the essential elements to consider as people conduct their estate planning. They are: a valid will, a healthcare proxy to designate who will make healthcare decisions, and a power of attorney to designate someone to deal with financial affairs if the grantor is living, but unable to manage them.
  • Many people involved in estate planning are concerned about long-term care vis a vis protecting their homes and other assets, and there are three ways to pay for long-term care. Either you pay for it yourself, purchase long-term care insurance, or get the government to pay for it via Medicaid.
  • The final issue, estate taxes, is less of a concern now that, for federal purposes, a person’s estate may be worth over $5 million – or $10 million for a husband and wife – and be exempt from estate taxes.
  • Although New York doesn’t currently have portability, limits in the $5 million range will soon be attached to New York estates.

2) Information Needed to Create a Will

  • Some attorneys have people prepare questionnaires, and asset lists, but I don’t. Instead, I have the person (or people) talk about what they want, their family and their assets, and then we put a plan together.
  • Blended families can be challenging. There’s the husband with his kids, the wife with her kids – and now, what happens if one of them dies? Does everything go to the surviving spouse? We talk about varied scenarios, such as what happens if the spouse remarries and changes her will, leaving everything to her kids and omitting the spouse’s.
  • Certain techniques, such as trusts and entities, can ensure that some of your assets go from your spouse to your children because one should never rely entirely on one’s spouse to take care of your kids. The reason isn’t devious or anything. People change, so maybe you should put your children on an insurance policy or add them to an IRA account where they get assets directly. That way, they get some assets from you and, if there are other assets and your spouse doesn’t change their will, the kids will get more.
  • One’s spouse is entitled to a certain percentage of your wealth. If your will says, “I leave everything to my children,” with no prior conditions, the spouse could exercise a right of election against your estate. In prenuptial agreements, it is common for people to waive this right of election and allow each spouse to direct where their assets go. Otherwise, your spouse can make a claim against your estate.

3) Probate

  • Probate is used by the court to determine the validity of a will, and it causes people excess concern because of its reputation for causing difficulties. In reality, a well-adjusted, friendly family, can probate a will in six days to two weeks, depending on the queue at circuit court.
  • If, on the other hand, there is a lot of animosity, your will leaves people out, or people are concerned that the person you named will not be fair, it can be problematic.
  • People use a variety of techniques to avoid probate, including such things as revocable trusts in which, rather than keep their assets in their own name, they enter into trust agreements. They are the trustee and the beneficiary of the trust while they live. They appoint another trustee – perhaps one of their children – to take over upon their death and distribute the trust’s assets.
  • A trust can be challenged, but it’s harder because it doesn’t go before a court. In places where it’s very difficult to work through the court – such as in big cities – these trusts are used for fundamentally different reasons, such as because of conflict.
  • Revocable trusts are also used when one owns assets in another state and wants to avoid ancillary proceedings.

4) Power of Attorney

  • Signing a power of attorney gives someone authority to handle your affairs, and a standard power of attorney includes specific lists of powers from which to choose. For instance, an individual with power of attorney over your bank account will be authorized to pay bills and write checks, but not to sell your house – unless you give them that power.
  • It is very common for spouses to give powers of attorney to each other because of today’s confidentiality. For example, if the cable bill is in the husband’s name, the cable company just won’t talk to the wife.
  • If you need to handle matters for your elderly parents, you’ll need a power of attorney because it makes it easier for people to help others.’ If you’re sick and need help but don’t have one, it’s very difficult for people to assist you in handling your affairs.
  • A certain amount of abuse formerly took place when some general language authorized a certain amount of annual gift giving – usually tied to the gift tax and annual exclusions. If you want to allow the giving of gifts, include a major gift tax rider, a second document the legislature has established to curtail abuse. The most important factor in granting a power of attorney is choosing a person you can trust and about whom you have no reservations.
  • A person must be competent to grant a power of attorney. Otherwise, they can neither issue nor revoke one.

Do you need legal help and want to know what to do when planning your estate? Contact our Buffalo Estate Planning Lawyers to start your plan and schedule a confidential consultation and legal case evaluation.

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