Why Everyone Needs A Will
Do you have a will? Between one-half and two-thirds of American adults do not. Whether you need a Will depends on whether you answer “yes” to any of the following questions: 1. Do you wish to decide who receives your property upon your death, to determine how much each person receives, and when and in what manner they receive it? Do you wish to select who is in charge of safe-keeping your property and making important elections and decisions with respect to it upon your death? 3. Do you care who is appointed the guardian of your minor children if you and your spouse predecease them? In sum, virtually everyone needs a Will, and Wills are not just for the wealthy. Regardless of how much or how little money you have, a Will ensures that whatever personal belongings and assets you do have will go to family or beneficiaries as you specifically designate. Without a Will, the state law makes these decisions for you. If you have children, a Will is a must to ensure that you get to choose your children’s guardian. Few people plan to die in the near future, but if you die suddenly without a Will, you’ll be subjecting your family and loved ones to confusion and anxiety at what is already a difficult time. In addition, having a Will to create trusts for minor children, persons under a disability, or persons who cannot appropriately manage assets is one way to ensure how your accumulated wealth is handled for generations. There are other benefits to having a will, including tax benefits: Making use of the applicable exemption equivalent allowed under both state and Federal law is a useful technique to leverage the assets so that the appreciation on them passes to your beneficiaries estate tax free.
The Use of a Revocable Trust in New York
The revocable living trust is a useful nontax estate planning tool of many estate planners. A revocable living trust remains revocable and amendable during the donor’s lifetime, becomes irrevocable upon the donor’s death, and is the instrument that provides for the disposition of the donor’s property. Advantages of the revocable living trust are that it (1) allows for the continuity of asset management upon a client’s incapacity or death; (2) can reduce or eliminate the need for probate, which is beneficial in obtaining privacy for the estate as well as simplifying the process, especially if there are assets in multiple states or the possibility of a will contest; and (3) can reduce estate administration costs. Especially when the donor becomes incapacitated, the trustee of the revocable living trust may be more readily recognized as possessing the power to act on behalf of the trust (and the creator of the trust) rather than someone who only holds a power of attorney (particularly when dealing with major financial institutions). However, to effectively reduce probate costs, the revocable living trust must be fully funded. This ensures that all of the decedent’s assets are removed from the probate estate and requires all assets titled in the name of the client to be retitled into the name of the revocable trust . It is also advisable to have the donor/creator execute a pour-over will at the same time he or she creates the revocable trust as a precautionary measure to ensure that all assets owned by the grantor are distributed under the revocable trust’s terms.