In the State of New York, if you have no formal estate planning done, and you pass away with assets titled in your name alone (no joint owner or beneficiary designation) without a Will (intestate) the Estate Powers and Trusts law establishes who will inherit from you (distributees), and in what order of priority. If you prefer a different distribution of your assets, you should have a Last Will and Testament. In addition to the Will, there are documents you should have in place so that family or loved ones can assist you with important matters during your lifetime. Those documents are commonly known as basic estate planning documents. More extensive planning – for estate tax purposes, or to avoid probate, would involve different types of trusts.
- Are the following statements True or False:
- Only high net worth individuals need to have a Last Will and Testament.
- If you die without a Last Will and Testament (intestate) your estate passes to the State of New York.
iii. Having a Will in place does not avoid the probate process (legal steps to prove Will valid)
In addition to delineating who should inherit your assets, a Will can nominate guardians for minor children, and can authorize the named executor to establish trusts for minor children or disabled beneficiaries.
- Tax planning is part of Estate Planning. The basic exclusion amount, or the net value of assets an individual can leave to heirs (other than a spouse) without incurring taxes has been increasing over the past several years.
- In 2022 what is the amount an individual can leave without Federal tax consequences?
- What is the amount an individual can leave without New York State tax consequences?
- True/False: A Health Care Proxy is the document that designates an agent/representative as well as an alternate agent to make any medical decisions should an individual be unable to make decisions. In contrast, a Living Will is specific instructions to be followed for end of life or terminal care.
- A Durable General Power of Attorney is a document which allows an individual (principal) to appoint representatives (agents) for financial, personal and business transactions.
Are the following statements True or False:
- It is possible to have multiple agents named on a Power of Attorney.
- A valid Power of Attorney can be used after the principal has died.
iii. The principal can revoke or terminate a Power of Attorney.
- There are many different types of Trusts, some are created during one’s life, and some are to be established as instructed in a Will, after one’s passing. The trusts established in a Will are known as testamentary trusts.
Are the following statements true or false:
- A Trust created during one’s lifetime remains a private agreement and will avoid the cost and delays associated with the probate process.
- Avoiding the probate process can avoid challenges by disinherited parties.
iii. An Irrevocable Trust can both avoid probate and protect the value of assets held in the trust from future long term care costs.
- An Irrevocable Trust CAN be revoked if all necessary parties agree as per NY State Estates Powers and Trust law.
Answers: 1i) False. 1ii) False. 1iii) True. 2i) $12.6M. 2ii) $6.11M. 3) True. 4i) True. 4ii) False. 4iii) True. 5i) True. 5ii) True. 5iii) True. 5iv) True.
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