Estate Planning 101

What is estate planning?

Estate planning is controlling your assets while you are alive and of sound mind, and arranging for their orderly distribution upon your death. While most people prefer to be in charge of their assets, many decide to use a financial advisor to maximize their investments. Estate planning also involves preparing for the event of incapacitation due to advanced age, an accident, or illness. Lastly, estate planning is the precise arranging of your assets, what you want to give, and who you want to receive them.

What makes up an estate?

Your estate consists of everything that you own. This includes your primary residence, any vacation or rental properties, life insurance, cash in bank accounts, real estate holdings, business interests, investments, automobiles, fine art, and collectibles. The value of your estate is based on the "fair market value" of your assets.

Should I have an estate plan?

Everyone should have an estate plan, whether they are single or married, especially if they have minor children, special needs children, or own a home. No estate is too small for estate planning, and as long as you are over 18, you are not too young to have a plan. Having an estate plan ensures that you determine how your assets will be managed in the event of incapacity, and it determines how they will be distributed at the time of death.

How old should I be when I plan?

There is no age requirement, the sooner you plan the better! One of the primary purposes of estate planning is to prepare you and your family for the event of injury or illness which results in incapacity or death. While most of us view the contemplation of death as morbid, when we put off estate planning, our families are the ones that are caught off guard and unprepared. Despite that it may be briefly uncomfortable, estate planning is one of the most thoughtful and considerate actions you can take to protect your family.

What is probate?

Probate is the court-supervised process of validating a will and settling an estate. The assets that pass through probate are those that pass through a will, or those that the individual owned in their sole name at the time of death. Assets with beneficiary designations, payable on death designations, and assets held in a trust pass outside of probate.

What happens if I die without a will?

If you die without a will, your assets will be distributed according to New York's intestate succession laws, which means they would usually go to your closest living relatives.

What is New York's exclusion amount?

New York's basic exclusion amount determines an estate's filing threshold. The basic exclusion amount has increased from $1 million to $2,062,500 for deaths occurring on and after April 1, 2014. For deaths occurring on or after April 1, 2015, the basic exclusion amount will be $3,125,000.00. That figure will increase to $4,187,500.00 for deaths occurring on April 1, 2016 and before April 1, 2017.

For more in-depth information about estate planning, please contact a Nassau County estate planning lawyer from The Virdone Law Firm, P.C. We offer free consultations to all potential clients – we can be reached at (516) 712-2142.

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