Frequently Asked Questions
What types of things make up a person's estate?
An estate is made up of the total property owned by a person, including both assets, such as real estate and liabilities, such as mortgages or debts. Property may be real property, such as houses, apartment buildings, land, or commercial buildings and personal property, such as vehicles, jewelry, art, collectibles, musical instruments, furnishings, any type of equipment, boats, bank accounts, stock portfolios, insurance policies, cash, retirement funds, notes or loans that are receivables, and more. It is common to think of estate in terms of only the rich, but most people have something that constitutes as their personal estate, regardless of its size.
Why is estate planning important?
While planning an estate may not be mandatory, it is a highly encouraged decision to make and this wise choice now can benefit you and your family down the line. If you die without an estate plan, such as a will or trust, your property will not be distributed according to your wishes or desires. You will have no input as to how your estate will be disposed of. You will be subjecting your estate to probate, creditors, lawsuits, judgments, death taxes, and the possible squabbling of relatives and heirs, all of which can take a chunk out of the total value of your estate. With an estate plan in place, you can pass on your property to the people you choose with the least amount of tax liability and other costs. It is often left up to the family or other loved ones of a deceased individual to handle their affairs and divide their estates. There are many walls they can run into during the probate period, distributing the estate and through other key times. Dealing with some of these issues beforehand can provide monumental relief and reduce time and stress.
When is it best to have a will as opposed to a trust in an estate plan?
Whether a will or a trust is the better tool to use in an estate plan or a combination of both depends entirely on what is in involved in the estate and what your objectives are. In some cases, however, a will is optimum when the estate is so small that the probate process will not be required or when it is safe to leave the estate through a plan using beneficiaries and / or joint tenancy of property ownership. This works when there won't be any major death taxes, when it isn't necessary to hold some part of the estate in a trust fund to be paid out gradually to an heir, as for a college education, and when the estate owner does not have mental incapacity which might make financial transactions difficult or impossible.
What is a trust and what does it do?
A trust is a legal entity set up to take care of property for the benefit of heirs and beneficiaries. It is basically a contract between two parties for the benefit of third parties. A grantor (owner of the estate) and a trustee (manager of the estate) create a legal private agreement wherein the trustee will protect, control, and transfer the property to the heirs according to the terms of the agreement. A living trust is where the grantor maintains all three of the trust positions; he is grantor, trustee, and beneficiary. Depending on what you wish to accomplish with your estate, you should work with an experienced estate planner such as the Long Island estate planning lawyer at the firm who can advise you on the best plan for your needs.
Who should plan their estate?
It is a common misconception that estate planning only pertains to the top 2% or other highly wealthy individuals. This misconception is not completely unfounded. It certainly is an incredibly important step for those with significant resources and assets to ensure they are protected, but it is not only them that should do so. In fact, almost anyone can truly benefit through the process of planning and protecting their estate. Unforeseen events can happen at any time leaving those that weren't proactive at the mercy of chance. Taxes, real estate, life insurance, probate, cars, jewelry, funeral arrangements, medical care and more can be covered in these terms and these are factors that influence more than just the top financial few. Not only does estate planning provide a sense of assurance for the owner themselves, many obstacles in the event of their death can be avoided; allowing their family to focus on what is important during that time instead of what tasks they need to get done to handle the estate of their loved one.
Does everyone have to go through probate?
For those that are looking to authenticate and move forward with the will of a loved one, they will need to go through this process if the monetary value is above a certain level. Without it they will be unable to carry out the terms that are outlined in it. Probate can be a simple or difficult process depending on how clear the will was and how well it is handled in the after math. While you will have to deal with it if you are looking to establish a will's validity and carry on with managing the estate, there are things that you can do to help make the process smoother.
Can I represent myself?
Depending on the situation, there are different levels of need and seriousness involved in a case. While you may be able to represent yourself, the more important thing to look at is whether you can retain the outcome you are looking for alone, if you have the time to devote and if the difficulty is worth it in the end. An attorney is experienced and has handled many of these cases before. They are likely to have valuable insight and can oversee that the process is dealt with efficiently.