Discussing estate planning with the family

New York residents may be interested in ensuring that their assets are transferred to heirs as they intended. Having the frequently avoided inheritance conversation may be one of the best ways for securing heirs’ understanding of how property is to be divided. UBS estimates that $40 trillion in personal wealth will be passed to heirs by the year 2050.

The discussion about inheritance can be emotional, but putting it off for too long can be expensive. Both parents and children may not be comfortable discussing death too openly. Parents may also not want to discuss wealth to be handed down for fear that it will be demotivating to the younger generation. However, facing the reality of the inevitable can help parents prepare their heirs for the tax consequences and other responsibilities that may be tied to the wealth.

If the parent’s resources are not distributed equally with all children, it may cause disruption in the family. If one or more of the children has been taking care of the parents, they may feel that they are entitled to more of the assets. For example, if the family jewelry is passed down to only the daughters, the sons may feel that they have been slighted. Parents discussing their reasoning for how they determined the allocation of assets may help avoid hard feelings and misunderstandings among family members.

In order to facilitate the discussion and help draft an estate plan, a benefactor might work with an attorney. An attorney might be able to help a client create a plan that provides for the heirs and beneficiaries while still distributing the wealth according to the benefactor’s wishes.

Source:  NASDAQ, ” Expensive Consequences of Not Having the Dreaded Inheritance Conversation “, Motley Fool, August 23, 2014

Robin Williams created revocable trust for assets

Robin Williams fans in New York might be interested to know that his family could be spared the ordeal of going through probate for certain assets. When someone leaves a will, probate courts verify the document and still make decisions regarding the execution of the deceased person’s estate. Court records can reveal specifics of a person’s estate that families might like to keep private. Since Williams set up at least one revocable trust, probate might not affect certain aspects of the late actor’s estate plan.

Revocable trusts offer a range of benefits that wills do not, but they may cost more to create initially. Savings might offset this cost after the documents are established, however. Modifying terms of a revocable trust is a more informal endeavor than making changes to a will. There are many reasons one might wish to change the terms of a trust, including getting married, having a child or getting divorced.

People can also set conditions upon inheritances with a trust. Like Williams, someone could put assets aside for their children in a trust and mandate at what age each child receives all or some of their inheritance. However, trustee must be found to manage the assets before and during their distribution. Another thing to remember when establishing a trust will not do any good unless assets get transferred into it. For people who do not wish to transfer assets into a trust during their lifetime, they can put a testamentary trust in their will. This action ensures that assets go into the trust upon someone’s death.

Estate planning can spare one’s family unnecessary stress and intrusion into their privacy. Developing such a plan might be made easier with consultation with a lawyer.

Source:  Daily Finance, ” Robin Williams’ Estate Plan Spares His Heirs a Lot of Drama “, Dan Caplinger, August 14, 2014

Source:  Daily Finance, ” Robin Williams’ Estate Plan Spares His Heirs a Lot of Drama “, Dan Caplinger, August 14, 2014

A brief outline of irrevocable and revocable trusts

Some New York residents may find that establishing a living trust is an attractive option for guiding asset disbursement upon death while avoiding a potentially frustrating probate process. For an individual considering a revocable or irrevocable trust, understanding some basic points regarding these trusts can help an individual to approach the subject more gracefully with a financial advisor or attorney.

Revocable trusts contain provisions that a grantor can change or cancel at any time while still living. They provide grantors with flexibility in handling assets, but they leave those assets unprotected from debt collection and other potential drains.

Irrevocable trusts cannot be altered once finalized without an affected beneficiary’s consent. Grantors forfeit access to the assets listed in these trusts, but that forfeiture shelters the assets against creditors, estate tax and other expenses when applicable.

Both of these types of trusts enable wills to be handled without subjecting family members to potential embarrassment or conflict at probate hearings. They also enable benefactors to name successor trustees and guardians to manage funds if neither parent is alive to do so. Trustees require exclusive access to the assets in irrevocable trusts to disburse the funds; either finding a bonded trustee or using a bank may help to insure against losses from careless borrowing.

Consultation with an attorney who is familiar with the complexities of trust administration can help a living benefactor organize his or her wishes as clearly as possible. Upon examining the factors present in a client’s financial and family dynamics, a legal professional may see merit in advising a client to seek an irrevocable trust for protection from taxation or a revocable trust to allow the funds to contribute toward long-term debt relief.

Source:  NBR, ” A matter of trusts: Benefactors, heirs and their advisors “, Maureen Niven, August 04, 2014

When a person dies without a will

Some New York residents may wonder what happens when a relative dies without a will. If the decedent leaves more than $30,000 in assets, the estate goes through administration, which is similar to probate. The difference is that probate occurs when the decedent leaves a will directing the distribution of assets. Administration occurs when a person dies intestate , or without a will, and the distribution is made in accordance with the state law of intestacy.

To start administration, the state issues letters to any person who may be entitled to claim the assets. That person may open a case in Surrogate’s Court by filing a petition. The petition lists the name and address of the decedent, the petitioner’s name, and the petitioner’s relationship to the decedent. If the petitioner is not a relative, it will be necessary to state the basis for asking to open the case. The petition also lists other individuals entitled to inherit under the law. Then, the petition gives the estimated value of the assets and a description of any real estate.

One reason that it is so important for a person to have a will or trust created during life is that the state’s list of relatives who inherit is not based on personal relationships. When there is no will, assets could be distributed to a distant, practically unknown relative rather than a close friend. Or assets might be split equally among relatives, without regard to whether the decedent had a closer relationship with one relative than the others.

An estate planning and administration attorney may be able to help create a will that ensures assets will be distributed to the intended beneficiaries. It may also be possible for the attorney to help probate the will and distribute assets when the time comes.

Source:  NYCourts.gov, ” Administration – Decedent did NOT leave a Will (and estate assets of more than $30,000.00) “, August 04, 2014