Factors to Consider When Planning Your Estate

WHAT SHOULD MY GOALS BE WHEN PLANNING MY ESTATE?

Establishing a proper estate plan is one of the most important things you can do for yourself and your family during your lifetime. It is our belief that a carefully considered estate planning should allow you to accomplish each of the following goals:

  • Plan for yourself and your loved ones without losing control of your affairs.
  • Account for the possibility of your own disability.
  • Transfer your assets to your desired beneficiaries the way you want them to receive it and when you want them to receive it.
  • Save every tax dollar, professional fee and court cost that are legally possible to save.
  • Plan for future long term care needs and to prevent Medicaid estate recovery claims upon your passing.

 

WHAT FACTORS SHOULD I CONSIDER WHEN PLANNING MY ESTATE?

Proper planning goes well beyond merely deciding who receives your property when you pass away. There are many other factors to consider, such as:

 

ESTATE TAXES

Depending on the size of your estate, estate taxes may be owed upon your passing. Both the federal government and New York State impose separate estate taxes. Each individual, however, has a federal estate tax exemption and a New York State estate tax exemption. Assets passing outright to a spouse are not subject to estate tax. Proper planning can maximize each individual’s estate tax exemption and preserve more of your assets for your family.

 

PROBATE

In order to pass assets upon your death through the use of a Last Will and Testament, probate is required. Probate is the legal process by which the Court authenticates an individual’s Last Will and Testament and issues Letters Testamentary to a designated Executor. Only upon being issued Letters Testamentary can your Executor collect assets, pay expenses and transfer your assets as your Will directs.

While the probate process is often effective in transferring assets upon death, there are several undesirable consequences that many people seek to avoid. In addition to court costs and attorney’s fees, the probate process can be quite lengthy depending on a variety of factors. It is not unusual for the probate process to take several months, or in some cases, over a year. During the time before the Will is admitted to probate, your Executor has no power and no distributions can be made.

Another negative consequence of probate that often goes overlooked is Medicaid’s right to assert an estate recovery claim. When a Medicaid recipient passes away, Medicaid may have the right to recover for the benefits provided to the recipient by asserting a claim against the individual’s probate estate. Assets that do not pass through probate are not subject to a Medicaid estate recovery claim.

 

PLANNING FOR MINOR BENEFICIARIES

When planning for minor beneficiaries, such as children or grandchildren, it is import to protect and provide for the beneficiary by directing how and when distributions should be made and who will be responsible for managing property for the beneficiary.

 

PLANNING FOR BENEFICIARIES WITH SPECIAL NEEDS

When planning for a loved one with special needs, it is imperative to provide for the continuing care your loved one without disruption of public benefits, such as SSI and Medicaid.

 

PLANNING FOR LONG TERM CARE NEEDS

Many people think about estate planning in terms of passing assets to family and loved ones upon death. While this is an important aspect of estate planning, your future needs during your lifetime must considered. By properly planning for your own future long term care needs, you can maximize the assets that pass to your family and loved ones upon your passing.

 

HOW SHOULD I PLAN MY ESTATE?

There is no “one size fits all” estate plan. A proper plan is one that is specifically tailored to meet your needs. It is the job of your estate planning attorney to personally sit down and discuss with you your goals and aspirations for you and your family so that the proper plan can be developed. Before making such an important decision, it is important that you understand the options that exist and how they apply to your specific situation. For an overview of various estate planning tools, click here.