Establishing an estate plan might be one of the most important things you’ll ever do for yourself and your family. We don’t like to think about death or disability and often attribute it to later years. However, we also know that accidents and illnesses can happen at any time. When it does, peace of mind comes from taking steps in advance to protect everyone from financial distress on top of emotional loss. An estate planning attorney helps put you in charge of your future and finances with well-established instructions and documentation that your family can follow. This will save time, money, and frustration whether you become disabled or pass away.
Providing for Incapacity
Physical or mental incapacitation can make managing your financial affairs difficult or impossible. You might believe that your spouse or adult children can take over right away, but the authority to manage your finances requires a court declaration that you are legally incompetent first. Then the court will decide who is legally designated to withdraw money from accounts, pay bills, take distributions from your IRAs, sell stocks, or refinance your home. Even if the court manages to appoint a person you trust, they may have to come back to the court each year and show how they spend and invest every penny.
If you are incapacitated, a will does not take effect until you die, and a power of attorney may be insufficient for your family to take over immediately. The right combination of legal documents ensures you have designated a person or persons that you trust – maybe a family member or close friend – to make medical or financial decisions about healthcare, asset distribution, or final expenses that are aligned with your wishes.
A durable power of attorney for healthcare, as well as a living will, can inform others about medical treatment preferences, including the use of extraordinary measures, should you become permanently unconscious or terminally ill. A financial power of attorney designates a person to manage your expenses exactly as you’ve instructed.
Dying intestate or without a will leaves things to chance, as individual family members may not know your true intentions for assets and property. However, even with a will, your loved ones have to go through the expensive, time-consuming, and public probate court process, which dictates the distribution of assets while your family waits for the estate to be settled. Assets may be frozen for weeks or months as they determine which items belong to specific beneficiaries. A surviving spouse may have to endure stressful court proceedings before accessing your accounts for living expenses, funeral costs, or receiving their inheritance. Proper estate planning ensures assets pass to your loved ones quickly, inexpensively, and privately by avoiding probate altogether.
Providing for Minor Children
Your estate plan addresses specific concerns regarding the upbringing of your children, including stepchildren. When children are young, it’s possible to allow your surviving spouse to devote more attention to their needs without the burden of working. You may also want to provide counseling for your spouse if they lack the experience to handle financial and legal matters.
Should both you and your spouse become incapacitated or die simultaneously or within a short period of time, a contingency plan can be put in place to designate a person or persons to manage assets and care for the children. The person or trustee in charge of the finances need not be the same as the guardian of your children. In fact, you may purposely designate different persons to maintain a system of checks and balances.
Without a plan, deciding who will manage your finances and raise your children is left to a court of law. Even if the court selects people you trust, they may have to deal with undue burdens and restrictions, such as having to provide annual financial transactions.
Planning for Estate Taxes
The size of your estate determines whether you will owe any federal estate tax and how your estate plan works. Each state has its own estate and inheritance taxes. An estate attorney understands how the laws work and develops a strategic plan to reduce or eliminate estate tax. The earlier you start an estate plan, the better.
Charitable Bequests – Planned Giving
Your estate plan can be set up to provide for charitable organizations in various ways, during your lifetime or at your death. Planned giving can let you receive a stream of income for life, earn higher investment yield, or reduce capital gains or estate taxes.
A well-crafted estate plan provides your loved ones with an effective and efficient way to avoid guardianship while alive and probate at death, as well as minimizing estate taxes and unnecessary delays. A qualified estate planning attorney can review your family and financial situation, specific goals, and explain your various options. You’ll feel better knowing you have an estate plan in place that provides for yourself and your family regardless of what happens.
The attorneys at the Law Office of Gold and Dezik are dedicated to helping you and your loved ones understand estate and trust planning, elder law, Medicaid planning, and trust settlements. We discuss New York estate laws in and around the Niagara Falls area to help you create an estate plan that meets your family’s needs.
The Law Office of Gold and Dezik assists clients in the Western New York area, including Niagara Falls, Lockport, Buffalo, and beyond.