WILL DRAFTING AND TAX PLANNING
- Although to some this may seem like a difficult topic to consider, its importance cannot be over emphasized. Estate planning is a complex field that involves many areas including wills, trusts, insurance, and business continuation. Proper estate planning is the creation, conservation, and distribution of wealth. Estate planning is essential to making the wealth dispersement process to those you love before and after your death as seamless as possible. It also helps reduce the financial burden on those who are left behind. Additionally, it will help to minimize administrative costs and taxes. Your estate is comprised of everything you own, your car, home, other real estate, bank accounts, investments, life insurance, and personal possessions. Planning for your assets in the event of your passing is something every person should consider, regardless of age.
- The Law Office of Eric C. Puma, P.C. will facilitate the estate planning process by completing and coordinating an assessment of your estate and objectives. We will sit with you and together we will analyze your specific needs. We will make recommendations and suggestions for you to consider and then draft the specific documents (Will, Health Care Proxy, Power of Attorney, etc.) which are appropriate for you.
WILL PROBATE AND ESTATE ADMINISTRATION
- When a person dies, his or her estate needs to be collected and managed. Estate administration involves gathering the assets of the estate, paying the decedent’s debts, and distributing the remaining assets either in accordance with that person’s last will and testament, living trust or pursuant to the laws of intestacy.
Frequently Asked Questions
hen someone passes away, his or her property must somehow pass to another person. In New York and New Jersey, any competent adult has the right to choose the manner in which his/her assets are distributed after his/her passing. A proper estate plan also involves strategies to minimize potential estate taxes and settlement costs as well as to coordinate what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event of death or disability.
Many individuals don’t engage in formal estate planning because they don’t think that they have “a lot of assets” or mistakenly believe that their assets will be automatically shared among their children upon their passing. If you don’t make proper legal arrangements for the management of your assets and affairs after your passing, the state’s intestacy laws will take over upon your death or incapacity. This often results in the wrong people getting your assets as well as higher estate taxes.
If you pass away without establishing an estate plan, your estate would undergo administration, a public, court-supervised proceeding. An administration proceeding can be expensive and tie up the assets of the deceased for a prolonged period before beneficiaries can receive them. Even worse, your failure to outline your intentions through proper estate planning can tear apart your family as each person maneuvers to be appointed with the authority to manage your affairs. Further, it is not unusual for bitter family feuds to ensue over modest sums of money or a family heirloom.
Your estate is simply everything that you own, anywhere in the world, including:
· Your home or any other real estate that you own
· Your business
· Your share of any joint accounts
· The full value of your retirement accounts
· Any life insurance policies that you own
· Any property owned by a trust, over which you have a significant control
A comprehensive estate plan should include the following documents, prepared by an attorney which takes into account your particular family and financial situation:
A Will, also referred to as a Last Will and Testament, is primarily designed to transfer your assets according to your wishes. A Will also typically names someone to be your Executor, who is the person you designate to carry out your instructions. If you have minor children, you should also name a Guardian as well as alternate Guardians in case your first choice is unable or unwilling to serve. A Will only becomes effective upon your death, and after it is admitted by a probate court.
A Power of Attorney is a legal document that gives someone you choose the power to act in your place.
In case you ever become mentally incapacitated, you’ll need “durable” powers of attorney for medical care and finances. With a power of attorney, the trusted person you name will be legally permitted to take care of important matters for you, such as paying your bills, managing your investments, or directing your medical care. A Health Care Proxy is where you designate the person or persons to make such medical decisions on your behalf. You can allow your health care agent to decide about all health care or only about certain treatments. You may also give your agent instructions that he or she has to follow. Your agent can then ensure that health care professionals follow your wishes. Hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own. A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.
Probate is the process by which a court distributes your estate. Several ways to avoid probate would be to set up a will or trust. If you have a will, the court will distribute according to what is stated in your will. Additionally, a trust may enable you to pass your estate on to your heirs without ever going through the probate process.
A trust is a legal entity in which assets become the property of the trust, and are overseen by a trustee. A trust can own anything from real estate, investment, vehicles, bank accounts, and other assets.
If you own a life insurance policy, you should speak to an attorney on whether you should name a trust as beneficiary, rather than an individual. If your estate will be subject to estate taxes, setting up an irrevocable life insurance trust and have the trust own the policies for you may be something to consider. This will remove the value of the insurance from your estate, thereby reducing the size of your estate and any estate taxes owed in order to leave more to your loved ones. Moreover, it ensures that the court will not be able to control the proceeds if a beneficiary is a minor, incapacitated, or no longer living when you die. Instead, the trustee will have control of the policies and their proceeds without court interference.