A lot of people try to reduce estate planning to a single action. You record your final decisions regarding the way you want your assets to be transferred after your passing. When the time comes, everything falls into place, and your wishes will come to fruition.
In reality, there are hands-on tasks that must be completed during the estate administration phase. Plus, there are laws that must be followed. You should definitely consider this detail when you are making your decisions.
Simple Wills and Probate
If you use a will to serve as the centerpiece of your estate plan, you name an executor to serve as the administrator. This can be someone you know personally, or you can use a professional fiduciary. The executor will be required to admit the will to probate after you are gone.
This is a legal process that takes place under the supervision of the Surrogate’s Court. During probate, final debts are paid, and creditors are given time to come forward seeking payment. The assets will be identified, inventoried, and prepared for eventual distribution.
Estate challenges can be presented while the estate is being probated by the court. In all, this process will take about 9 months to run its course if everything goes very smoothly. More complicated cases can take longer periods of time.
Living Trust Administration
The most commonly used alternative to a simple will as an asset transfer vehicle is the revocable living trust. As the name would indicate, the trust can be revoked by the grantor (the person that creates the trust) at any time. The grantor will serve as the trustee while they are alive and well.
There is no loss of control of the assets in any way. When the trust is being established, the grantor will name a successor trustee to administer the trust after their passing.
The administration process is not subject to probate when a living trust is used. As a result, it is simplified and streamlined. There are other benefits that go along with the utilization of a living trust that we will cover in a future post.
Irrevocable Trusts
In addition to the revocable living trust, there are also irrevocable trusts that satisfy certain targeted objectives. Some people use these trusts to gain estate tax efficiency, and they can be used to provide for people with special needs.
Plus, many people that are preparing for future Medicaid eligibility will use these trusts. Medicaid is important for many seniors, because it will pay for nursing home care. Medicare does not cover the custodial care nursing facilities provide.
The trustee will have specific duties related to the objectives that are being addressed through the utilization of the device. For instance, assets in a supplemental needs trust can be used to make a disabled beneficiary more comfortable without impacting government benefits.
Choosing a Trustee or Executor
There are a few things to keep in the forefront of your mind when you are designating a trustee or executor. First, this is not a ceremonial role that you bestow upon someone because you love and respect them. There are serious financial and administrative tasks that must be completed, so you have to take this into consideration.
If you don’t know anyone that is a suitable candidate, you can engage a trust company or the trust department of a bank to handle the administrative duties. When you use a professional, there are no conflicts of interest, there will be no longevity concerns, and the assets will be managed by a qualified representative.
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We are ready to spring into action if you would like to work with a Manhattan, NY estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 212-973-0100.
While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
- Navigating Probate: An Essential Overview - September 11, 2023
- A Letter of Final Instruction Can Complete Your Estate Plan - August 22, 2023
- Everything You Need to Know About Estate Taxes - August 21, 2023
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