Estate plan details are very important when protecting your family and legacy. There are many details of the estate planning process that are easy to overlook, especially if you
Far too many people procrastinate before they put initial estate plans in place. And when they finally act, they do the bare minimum without acquiring any legal advice.
This can cause unintended negative consequences because there are a number of important considerations that should be addressed. In this post, we will take a look at some of the details that are sometimes overlooked or misunderstood.
Is A Will Really The Right Choice?
There is a widely held belief about estate planning. A lot of folks think that it essentially boils down to the creation of a simple will. In reality, a significant percentage of people will be better served by a living trust.
Why would you want to look for an alternative to a will? One reason is because the inheritors receive lump sum bequests all at once when you use a will, and there is no asset protection going forward.
This can be less than ideal if you are leaving an inheritance to someone that is inexperienced, and there are older adults that are prone to bad financial decision making. There is also the matter of inheritance management for a minor child.
When a will is utilized, the executor that is designated in the document to act as the administrator will admit it to probate. This is a legal process that will take about nine months to run its course if there are no complications, and no inheritances are distributed during this interim.
If you value your privacy, you will not appreciate the probate process, because the records are available to the general public. Another drawback is the inheritance erosion because probate expenses reduce the value of the estate before it is transferred to the inheritors.
These drawbacks and limitations never enter the picture if you use a living trust instead of a simple will as an asset transfer vehicle. You would be the trustee while you are living, so you do not have to worry about losing control of the assets.
The successor trustee that you name in the trust declaration would distribute the assets to the beneficiaries after your passing outside of probate. There would be no court involvement, so the drawbacks that we looked at would never be a factor.
This trustee would administer the trust on behalf of the beneficiaries, including minors. A beneficiary can actually act be named as the trustee if this is consistent with your wishes, and any other adult that is willing to assume the role can serve as the trustee.
You can potentially use a fiduciary such as a trust company or the trust department of a bank to act as the trustee if you would like a professional to manage the assets. If you do not want the beneficiaries to receive their inheritances all at once, you can dictate a distribution schedule when you draw up the trust.
The living trust is just one of a number of different trusts that can be used. The ideal choice will depend on the circumstances, and you can become apprised of your options if you work with an attorney to devise your plan.
Important Estate Plan Details: Letter Of Final Instruction
Some people overlook a very important estate plan detail. The executor or trustee will need to know certain information to be able to administer your estate effectively. We are talking about hardcopy financial and estate planning documents and contact information for people that should be notified.
The location of keys to property and access codes fall into this category as well, along with login information for financial accounts that are managed online. You can share this information in any other relevant details in a letter of final instruction.
A Pour-Over Will Is An Important Estate Plan Detail
If you have a living trust, you may have some property that is still your direct personal possession when you pass away. To account for this, you can arrange for the property to be transferred into the trust through the utilization of a pour-over will. It’s possible to forget assets when thinking of the details involved in planning your estate, but a pour-over will would ensure that any assets are poured into the trust at the time of your passing.
Cognitive Impairment Affects Many Seniors
A significant percentage of elders become unable to handle their own affairs eventually due to cognitive impairment. You can name a disability trustee to manage the trust in the event of your incapacity if you have a living trust.
For property that is not held by a trust, you can name a financial manager in a durable power of attorney for property.
Advance Directives for Health Care
Your plan should include a living will, which is a document that is used to state your life support preferences in a legally binding manner. You can add a durable power of attorney for health care to name someone to make medical decisions for you that are not related to life-support.
To give the agent the legal right to access your medical information, you have to include a HIPAA release form.
Take Action: Watch Our On-Demand Webinar
We are ready to spring into action if you would like to work with our estate planning attorney S.J. Khalsa in the Manhattan and surrounding areas so that we can design a custom crafted plan for you. You can view our on-demand webinar to learn about Medicaid planning and how our talented team can help you through your specific situation. Contact our office at (212) 973-0100 if you have any questions following the webinar – or to schedule a consultation. Estate plan details are all important and we want to ensure that you have the help you need when you need it.
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.
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- A Letter of Final Instruction Can Complete Your Estate Plan - August 22, 2023
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