With many New Yorkers living busy lives, planning for their death may not be as important as shuttling the kids to school or getting ready for that important presentation at work. However, drafting a will or trust is important for protecting assets.
A will is helpful in protecting the family. It is a good idea for those with minor children, as it appoints them a legal guardian and sometimes even a financial guardian upon their parents' incapacitation or death. It also tells authorities what to do with a person's assets upon death.
Trusts are another type of estate planning tool. Many people prefer trusts because they eliminate lengthy and costly probate hearings. Assets go directly to the beneficiaries listed in the trust. However, trusts can be more expensive than wills. Trusts are best for those with a large net worth.
Although many people get caught up in the activities of daily life, it is important to take the time to create a will or trust. Wills and trusts include the wishes of the person upon death. Without one, the things that people cherish the most - family, homes, property and other assets - may be given to someone that they would not have wanted to have them. Children may be cared for by an undesirable family member.
Without a will, the state will decide who inherits the property. If a person had no family members, the state will inherit the property. A will can be created without a lawyer, so for a do-it-yourself type of person, creating a will can be done from the comfort of his or her home with the right software.
Source: InvestingAnswers, "The Common Mistake That Puts Your Entire Portfolio At Risk," Suzanne G. Beyer, Jan. 15, 2013