Estate planning is the process of arranging for the management and distribution of your assets and affairs in the event of your death or incapacity. This process includes a variety of legal documents, such as wills, trusts, and powers of attorney, as well as other important considerations.

Wills and Estate Plans

A last will and testament, or will, is a document that outlines how an individual wants their property distributed upon their death. Without a will, an individual dies "intestate," and the state will step in and distribute any property according to its own rules and laws.  There are four requirements for a valid will:

• Testamentary intent: the testator must have intended to create the will.
• Testamentary capacity: the testator must have understood they were creating the will at the time of its execution.
• No interference: the will must have been executed without fraud, duress, undue influence, or mistake.
• Proper execution: the will must have been properly executed through a ceremony, such as signing the will and having witnesses, in compliance with the state's laws.

Trusts and Estate Plans

A trust is a way to pass assets to someone else to protect them and avoid the probate process. The trustor, or owner of the property, transfers it to the trustee, who manages the property for the beneficiary. A trust can have multiple trustors, trustees, and beneficiaries, and can be used to minimize estate taxes, protect privacy, and safeguard assets from creditors.

Powers of Attorney and Estate Plans

A power of attorney (“POA”) legally authorizes one person to act on behalf of another. There are six types of POAs, each with specific purposes:

• Durable POA: takes effect immediately and continues even when the principal is incapacitated.
• Non-durable POA: takes effect immediately but does not continue when the principal is incapacitated.
• Medical POA: appoints a healthcare agent to make medical decisions when the principal cannot.
• General POA: allocates broad powers to the agent to act on financial, business, real estate, and legal matters.
• Limited (Special) POA: allows the agent to act for a specific purpose.
• Springing POA: takes effect when a specified event or medical condition occurs.

Other Elements and Considerations in Estate Planning

Estate planning also involves issues such as life insurance, retirement accounts, and charitable giving. Life insurance can provide financial support for loved ones after one's passing, while retirement accounts can be structured to minimize taxes and maximize benefits for heirs. Charitable giving allows individuals to support causes they care about and potentially reduce estate taxes.

 

Estate Planning:

    - Our Process

    - Estate Planning Basics

        - Wills

        - Trusts

 

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Relevant Blog Posts:

     - Introduction to Estate Planning

    - Exploring NY Trusts: A Look at Common Trust Types

    -  Estate Planning Posts