As the New York Probate Lawyer Blog recently reported, a majority of Americans believe that planning an estate and putting together a will is important.
However, as the survey also discovered, a majority of those questioned do not have the proper documents in place for themselves. A large percentage (36 percent) of parents with children in the home reported they don't believe wills or estate plans are among the most important documents to have on hand.
New York Probate Lawyers would argue that for people with children, the benefits of having estate plans in New York are extremely important. While many people consider death a far-off event that can be dealt with at a later date, the reality is that no one knows when they will die.
For that reason, making plans to leave assets behind to loved ones is important now. And for those who do not have large assets, such as business interests or real estate, it is still essential to make sure that documents are in place to pass on life insurance policy benefits or other assets such as stock funds and retirement benefits. These matters should be handled sooner rather than later. Ensuring that your wishes are followed after your death is important, as is alleviating the burden on loved ones left behind. The selection of guardians for minor children and the naming of executors and trustees is also an essential part of developing an estate plan.
Without a Last Will, New York intestate laws will determine which family member will receive your assets. Planning can save on taxes and confusion, especially if minor children are involved. Without proper documentation, the process can be time-consuming and frustrating for loved ones who are left to sort out the pieces. Having everything laid out can save everyone a lot of trouble.
Here are 10 tips from CNNMoney about estate planning:
- No matter your net worth, it's important to have a basic plan in place: Such a plan ensures that your family and financial goals are met after death.
- An estate plan has several elements: They include: a will; a power of attorney; a living will and a health-care proxy. For some people, a Trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.
- Taking inventory of your assets: Your assets include investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you're ever incapacitated?
- Everybody needs a will: A will tells the world exactly where you want your assets distributed when you die. It's also the best place to name guardians for your children. Dying without a will -- also known as dying "intestate" -- can be costly to your heirs and leaves you no say over who gets your assets.
- Trusts aren't just for the wealthy: trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.
- Discussing your estate plan with your heirs may prevent disputes or confusion: Be clear about your intentions and help remove potential conflicts after you're gone.
- The federal estate tax exemption -- the amount you may leave to heirs free of federal tax -- has recently changed and more changes are upcoming: The estate tax exemption was $3.5 million in 2009, and is now $5 million through 2012.
- You may leave an unlimited amount of money to your spouse tax-free, but this isn't always the best tactic: By leaving all of your assets to your spouse, you may waste your estate tax exemption and actually increase your surviving spouse's taxable estate.
- There are two easy ways to give gifts tax-free and reduce your estate: You may give up to $13,000 a year to an individual or $26,000 as a couple, this includes medical bills for someone.
- There are ways to give charitable gifts that keep on giving: If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die.