When you become a self-supporting adult, you assume responsibilities that you would never have given much thought to previously. You may have a spouse and/or children who are relying on you and your income, and you probably take this responsibility very seriously.
This line of thinking should extend to the subject of estate planning, which is one of these basic, core responsibilities of adulthood. Unfortunately, a very significant percentage of Americans are completely unprepared from an estate planning perspective.
When you plan your estate, you are making sure that your loved ones are provided for in accordance with your wishes, and this is a very profound endeavor. You should avoid procrastination and put a plan in place, because there is no way of knowing what the future may hold.
Once you resolve to put a plan in place, you are going to want to discuss your objectives with a licensed estate planning attorney. In this blog post, we will look at three important questions that are frequently asked, and we will provide basic answers.
Will my estate be subject to taxation?
We have a federal estate tax in the United States, and the exclusion in 2016 is $5.45 million. The credit or exclusion is the amount that you can transfer before the estate tax would be applied.
Our practice is in New York, and there is also a state-level estate tax to contend with in our state. Until April, the exclusion on the state level is $3.125 million.
Is a will the best choice for people who aren’t rich?
You could use a last will to state your final wishes, but there are reasons why you might want to use a living trust instead. If you use a will, it must be admitted to probate, and the heirs to the estate do not receive their inheritances until the estate has been probated.
In addition to the time consumption, probate can be expensive, and probate records can be accessed by anyone who wants to know how you distributed your resources.
These drawbacks could be avoided if you use a living trust as the centerpiece of your estate plan, and you do not have to be extraordinarily wealthy to utilize this type of trust.
Are there any considerations that people often overlook?
Incapacity planning is certainly part of the estate planning equation, and people often fail to address this component.
If you were to become unable to make decisions for yourself toward the end of your life, a court appointed guardian could take over your affairs. You can take the matter into your own hands and name your own decision-makers through the execution a durable power of attorney and a health care proxy.
If you would like to have all of your estate planning questions answered, contact us through this page to set up a no obligation consultation: Smithtown NY Estate Planning Attorneys.