What are the primary advantages of trusts?

If you live in New York and are currently navigating your way through the estate planning process, you may be sorting through your options in an effort to determine the best way to preserve your wealth for future generations. Chances are, you may be exploring the idea of placing some of your assets into a trust, but you may not have much experience in the area or a comprehensive understanding of exactly what trusts can do.

According to CNN, trusts, which are fiduciary arrangements that involve you placing certain assets under the care of a trustee, can prove tremendously helpful for those looking to  leave as much as possible behind for their loved ones. While different types of trusts offer different advantages, many people choose to place assets into trusts because of the many money-saving benefits they can offer.

More specifically, placing assets in a trust can safeguard them in a number of different ways. Typically, creditors or anyone who files a lawsuit against you cannot touch any assets you have placed in a trust. Assets you place in a trust also do not count toward the overall value of your estate, meaning they can be a great way to reduce the amount of estate taxes your loved ones must pay after your passing.

Another major advantage of placing assets in a trust is that doing so allows you to distribute what you want to your beneficiaries without dealing with the probate process, which can prove complicated. Creating a trust also allows you to designate someone as trustee, and this person can manage your trust and make distributions on your behalf if you pass away or become incapacitated.

This information about the benefits of trusts is informative in nature and not a substitute for legal advice.

What happens when an executor steals or fails to do the job

Managing someone else’s estate is a time-consuming and complicated task. Many times, it is also a thankless job. Some testators earmark special compensation for the executor of their estate or the trustee managing their trust. Others do not.

Regardless of whether or not an executor receives compensation for the tasks, he or she has a fiduciary duty to the deceased and the beneficiaries of the will or trust.

As an heir to an estate, you have a vested interest in how the executor or trustee performs the job. After all, the money in the trust or the assets from the estate will partially become yours after settling the estate. If you have reason to believe the executor may be stealing or otherwise failing in this important position, you may need to bring a challenge in court .

There are several kinds of theft common in estates

Many people with sizeable estates fail to outline and detail every valuable possession in the estate. They may simply generalize in how they split up assets. For example, one testator could value her jewelry collection at $100,000 and leave all of it to her daughter. However, the executor could easily pocket certain items without anyone discovering it right away. Stealing items of value from an estate is one way an executor can violate his or her fiduciary duty.

It’s also possible for an executor to perform transactions that don’t really benefit the estate. Selling assets or even the home of the deceased are common tasks. However, if the executor knows a real estate agent or a buyer, he or she could sell the home from much under market value to benefit that person (or perhaps to receive a lump-sum fee for the undervalued sale). In this situation, the executor is not acting in the best interests of the estate and the heirs.

Sometimes, executors just can’t perform the duties of the job

Not everyone who does a poor job as executor or trustee is a thief. Some people simply lack the ability to perform the duties of the job. They may live in another city, state or country. The executor could still have a full-time job and children that preclude him or her from devoting adequate time to resolving estate issues. Delays can cost the estate thousands, especially if bills don’t get paid on time.

If you have any reason to believe that the executor or trustee named by a deceased loved one is incapable of doing the necessary job, you may need to challenge the estate or executor in court. Doing so will protect your inheritance and ensure that someone capable of doing all the work ends up named as the new executor by the courts.

3 ways to reduce estate tax

If you live in New York and have worked hard to leave a legacy behind to your loved ones, you may have concerns about just how much tax the government will assess on your estate. Every dollar the government takes from your estate is one that cannot go directly to your loved ones, so learning how to minimize estate taxes is an important component of the estate planning process. At the law offices of Joseph A. Ledwidge, P.C., we understand the ins and outs of estate planning, and we have helped many clients who wished to preserve as much of their wealth as possible for their loved ones.

Per U.S. News and World Report, one of the most effective methods of  preserving your wealth and reducing estate tax involves placing your assets in trusts. Trusts can come in several different forms, so you can do some exploring to find the right type or types to fit your needs. When you create a trust, you must appoint some as trustee, and it becomes this person’s duty to oversee the trust and make sure assets undergo proper distribution to beneficiaries.

Another way you can work to  reduce estate tax involves simply giving some of your wealth away before you pass on. The lower the value of your estate, the less you can anticipate paying in taxes, so if you have loved ones you trust to use it responsibly, consider giving some of your wealth away now. Some people choose to do this in annual installments.

A third way you might be able to minimize how much your loved ones ultimately pay in estate taxes involves purchasing extra life insurance they can use to cover taxes once you pass on. If you choose to go this route, make sure you purchase the policy through an irrevocable life insurance trust to avoid adding to the estate itself, and thus, its tax burden. Find more about estate administration on our web page.

 

When a beneficiary starts living large

During the course of our professional duties here at Joseph A. Ledwidge, P.C., we see our fair share of family disagreements. Among the most acrimonious are those resulting from the alleged misappropriation of estate assets. We understand that everyone deals with grief in a different way: some mourn in solitude while others attempt to live life to the fullest. Unfortunately, the latter alternative sometimes causes discord when that lavish lifestyle is funded by trusts.

Our main concern, and that of the courts in many cases, is that the intent of a decedent is carried out faithfully. That is, after all, the purpose at the core of estate documents: that you have the ability to carry out your loved one’s will even in face of even the most extreme circumstances.

To this end, there are many ways in which you could want to modify a will or a trust when one of the beneficiaries begins to live beyond the means of the estate. For example, you might want to remove an executor. However, since this is a legal process and the individuals who hold executorial positions are often attorneys themselves, you may not always have a clear path to success in this matter. 

Lawyers tend to know the rules surrounding estates, and therefore are equipped to avoid obvious mistakes. Because of this, we make a point of being more diligent in our investigations than a corrupt executor would be in his or her obfuscations of evidence. We realize we are going up against our peers in many of these cases, so we leave nothing to chance. Please continue to the main site for detailed information.

When your parents die broke

Saying goodbye to your parents is one of the hardest things you may ever do, and no one wants to worry about juggling paperwork and tying up loose ends when they are going through such an emotionally taxing time. On top of planning a New York burial and helping your family heal after your shared loss, you may also have concerns about whether your parents left considerable debt behind, and if so, whether you might be responsible for it. At the law offices of Joseph A. Ledwidge, P.C., we are well-versed in the answers to these and related questions, and we have helped many clients navigate the many steps that often follow losing a parent.

Per U.S. News and World Report, almost half of today’s seniors die with less than $10,000 in assets , leaving an entire generation uncertain of what happens to their parents’ mortgages, credit card debts and other financial obligations. There is some good news for you if your parents pass on without any money left, however – in many cases, you will not be on the hook for such debts.

Instead, these debts become the property of your parents’ estates. Unless you co-signed on the debts or applied for credit together when you created them, your parents’ creditors typically cannot come after you.

That does not mean some  creditors are not going to try to get what they can from you, however. Debt collectors may tell you that you have an obligation to take care of outstanding bills in your parents’ absence, but remember how they make their money and take their words with a grain of salt. Learn more about the probate process on our web page.