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Frequently Asked Questions About Estate Planning
Are you wondering if estate planning would benefit you and your loved ones? Whether you know it or not, you have an estate. Your estate is comprised of everything that you own. This includes your vehicles, your home, property, personal belongings, jewelry, collectibles, investments, checking and savings accounts, and just about anything you can put a price tag on.
If you would prefer your assets and personal belongings to go to whom you want when you want as opposed to having the state control the distribution for you, then we urge you to continue reading our estate planning frequently asked questions below.
What Is Estate Planning?
Estate planning is a process that involves the assistance of professional advisors who are familiar with your long-term goals and concerns, your assets and how they are owned and your family dynamics. Estate planning covers the transfer of your property upon your death as well as a variety of other matters such as guardianship, life insurance, long-term care insurance, advanced directives, Medicaid planning, etc.
What Does It Mean to Die Intestate?
To die intestate means to die without a will. If you die without a will then your estate will go into probate proceedings and an administrator will be appointed by the court. When this happens, your assets are distributed according to New York's laws of descent and distribution, which may not be the way you would have wanted them to be distributed.
Why Do I Need a Will?
The primary reason for creating a will is to have control over who you leave your property to and in what manner. With a will, you can be specific; for example, you can say that you want your family photos to go to your daughter Nancy, your coin collection to your grandson Sam, and your 1959 Chevy Impala to go to your son Paul.
What Are Some Benefits of Having a Will?
There are several advantages of creating a will, including:
- It allows you to appoint a guardian if you have minor children
- It allows you to designate an executor to administrate your estate after you die
- It allows you to appoint someone to make important health care and financial decisions for you if you are incapable of doing so
- It allows you to distribute property to friends, relatives, or charities who would not benefit under the state's intestacy laws
- It allows you to distribute your property to who you want, when you want
What If I Have Young Children?
If you die without a will and you have young children under the age of 18, a court-appointed guardian will manage your minor child's share of your assets. While the court may appoint your spouse, this is not guaranteed. If any portion of your assets needs to be spent on your child's education, clothing, or living expenses, prior court approval will be necessary. The court also requires that guardians file annual accountings of income and expenses.
Who Will Oversee the Administration of My Estate?
In your will, you name an executor of your estate who will administer and distribute your property when you pass. An executor can be a friend, a family member, an attorney, or a bank or trust company that specializes in handling assets.
How Important Is My Choice of an Executor?
The only way you get to choose an executor is if you make a will. Not only is it important to have trustworthy and qualified people handle your affairs during life, but it is equally valuable to have such people handling your affairs after you die.
Is All Property Distributed Through a Will?
Not necessarily. Property held jointly with another or in a trust, or life insurance with a named beneficiary will not be distributed through a will. The same can be said for individual retirement accounts and pensions. The will is only part of your plan to distribute property, thus in order to create the most comprehensive estate plan, you will need to discuss your overall estate planning wishes with an attorney.
What About Jointly Owned Property?
If you own real estate property with another person as joint tenants with rights of survivorship, then the property will pass directly to the remaining joint tenant upon your death and it will not be included in your probated estate.
What Is a Revocable Trust?
A revocable trust, also known as a living trust, is one that you create during your lifetime. A living trust allows you to manage your assets and it protects them should you become ill, disabled, or mentally incapacitated due to aging. Living trusts allow you to change or amend them whenever you please, and they can allow you to avoid probate.
Do I Need a Trust?
Trusts are valuable legal tools that are often a part of a good estate plan. They provide incredible flexibility for the ownership of certain assets and assist heirs in achieving a number of goals that would not be available otherwise. When a trust is created by a will it is called a testamentary trust, and the trust provisions are contained within the will. A trust created during your lifetime is called a living trust, and the trust's provisions are contained within the trust agreement.
Should I Get Life Insurance?
Life insurance plays an important role in financial, retirement, and estate planning and should be coordinated with the other aspects of your estate plan. With life insurance, you can designate one or more beneficiaries to receive the proceeds upon your death or you can make the proceeds payable to your probate estate or to your trust.
To learn more about the components of a good estate plan and how you can benefit from putting a plan into action sooner than later, contact a Long Island estate lawyer from Adler Law by calling (516) 740-1184 today!
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