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Estate Planning

Estate Planning

June 28, 2017 08:05 AM

You wouldn’t use a screwdriver to hammer a nail—and in making an estate plan, you likewise need the correct tools to accomplish your goals.

Choices and Flexibility - Making a plan is about giving you choices.  If you don’t plan in advance, you get New York’s “one-size-fits-all” law--your property goes to your closest relative(s) living at the time of your death.  Your money could end up in the hands of people who you hardly know.  If you want to share your money with people beyond your family, an estate plan allows you to provide for them.  Likewise, an estate plan can help you to leave money to a charity.

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Blended Families – Many people have married more than once, and/or have children from earlier relationships.  In a second-marriage situation, the spouses typically want to take care of one another, but in the end, they want their children from the earlier relationship to receive their assets. Without a plan, all of the assets of the first-to-die would go to the survivor.   The survivor would then have full control of the deceased spouse’s assets—to the possible exclusion of the deceased’s children.

Protecting Beneficiaries - Estate planning allows you structure your money in ways that serve the best interests of your beneficiaries.  For example, if you know that a particular beneficiary is not responsible with money, their funds could be placed in a trust—so a trustee would manage the money for them.   Also, if one of your beneficiaries is disabled and receiving public benefits, a special type of trust may be needed to allow them to enjoy their inheritance without losing their benefits.

Minimizing Taxes – Sometimes, the timing or the method used to transfer property can have a big impact on whether the transaction is taxed.  An estate plan will consider the tax implications of how you want to distribute your assets—and will suggest ways to accomplish your goals with the least amount of taxation.

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