Estate planning can have many facets depending on your family and health concerns, assets and taxes.
A last will and testament names those who will inherit property which you own in your own name. It also:
- Name a guardian for minor children.
- Bequeath assets that will go through probate.
- Name executors or trustees to oversee the process.
Power of Attorney
A durable power of attorney names an agent who can act in your place, for all or some of your personal financial affairs. It is an invaluable part of estate planning because it:
- Survives mental incapacity so that an agent can act per your wishes even if you are no longer mentally able to do so.
- Enables you to delegate all or only some authority to an agent.
- May avoid the need for a guardianship or conservatorship proceeding in the event you become mentally impaired.
Healthcare directives such as a healthcare proxy designate an agent to:
- Carry out your wishes if you are unable to make healthcare decisions.
- A living will or DNR informs medical personnel of your decisions regarding end of life care.
Trusts are separate legal entities that are created for unique purposes. The trust becomes the legal owner of property transferred to it, and a trustee has the fiduciary responsibility to hold and manage the trust property as spelled out in the trust agreement. In certain types of trusts, the person who creates the trust, can be the trustee for beneficiaries. In other types of trusts, the person who creates the trust is not the trustee and instead a third party is appointed – often for tax reasons.
Following are examples of types of trusts commonly used in estate planning:
- A Living trust is created to own assets to avoid the probate process.
- A Medicaid or asset protection trust is designed to preserve assets and qualify for Medicaid.
- A Qualified personal residence trust enables you to transfer your primary residence or a vacation home out of your estate, for tax purposes.
- An Inter-Vivos trust is a trust you create while you are alive and may provide for your children.
- An Irrevocable life insurance trust is created to own life insurance so it is not subject to estate tax.
- A Defective grantor retained interest trust is created to pass property or a family business to the next generation.
There are a variety of trusts that can be established and we spend the time to plan one that works best for you.
You may have other special concerns which must be addressed in your estate plan. These could include:
- Special Needs Trust for a relative receiving benefits on account of a health condition or disability.
- Significant IRA/Pension/401(k) assets which you want to leave to a spouse or children.
- Collections of art or other valuables which must be appraised and preserved.
Questions? Please call Susan G. Parker esq. PC at (914) 923-1600 with any questions or concerns.