Estate planning is crucial for your family’s financial well-being because it simplifies the transfer of your wealth and assets to beneficiaries upon your departure. Moreover, proper estate planning can not only ensure that your wishes are carried out after passing but also reduce some of the state and federal tax burdens that your family or loved ones may incur. Our attorneys at Pryor Law have handled numerous estates and can help you plan an estate that is distinctive to your needs to protect your wealth for future generations. Contact us for a consultation with one of our expert estate planning attorneys.
Our Services:
The attorneys at Pryor Law have decades of experience guiding clients through the treacherous waters of estate planning. We handle all legal matters relating to estates, including:
- Wills and Trusts
- Durable Powers of Attorney
- Healthcare Proxies
- Asset Preservation
- Probate of Estate
- Estate Administration
- Estate Litigation
Wills
A last will in testament is commonly referred to as a “Will.” A Will is a legal document that dictates how you designated your assets to be given to desired beneficiaries and sets forth any additional instructions or wishes upon your departure. In short, a properly executed will gives you control over your assets after you pass. In a Will, you will appoint an executor of your estate, who is entrusted with managing your assets and affairs until it completes the probate process. If you have minor children, you should also select a legal guardian to look after them until they turn 18.
With a properly executed Will in place, you can make specific bequests to your desired beneficiaries, such as your home or vehicle. Without this, you leave this entire process to the courts, which utilize a “one-size-fits-all” statutory approach when distributing your wealth and naming legal guardians.
Regardless of their structure, Wills are subject to probate for verification purposes and to ensure the decedent’s wishes and instructions are properly executed. Probate is the legal process by which a last will in testament is authenticated to distribute the decedent’s assets to the entitled individuals. This process typically takes a few months to complete; however, probate may take years to settle in instances involving disputes or conflicts. Click here for more information about executors and the probate process.
Finding a trusted and experienced estate planning attorney is crucial for ensuring your Will is drafted correctly, which should reduce any potential objections or disputes that may arise after your passing. Potential issues can arise if a Will is executed improperly, leaving the possibility of objections to the Will. However, an experienced estate attorney can help ensure your Will accurately and legally distributes your estate according to your wishes.
Estate Taxes:
There are two types of state and federal taxes that apply to estates in New York State: income tax and estate tax. Any income that an estate earns before it is closed is subject to ordinary income taxes. Additionally, in certain estates a one-time tax is applied to the estate itself, which the executor must pay on the estate’s behalf. New York State Law establishes following:
- Estates with a value of $3,125,000 (per person) or less are exempt from paying any estate tax.
- Estates with a value of $3,125,000 (per person) or more are subject to an estate tax. It’s important to note that estate taxes will tax the entire estate, including the first $3,125,000.
New York State estate taxes, like income taxes, are progressive. They start at approximately 5% and increase to a maximum of approximately 16%.
In addition to New York State taxes, estates are also subject to federal taxes as described below:
- Estates with a value of $5,900,000 (per person) or less are exempt from federal estate taxes.
- Estates with a value of $5,900,000 (per person) or more are subject to a federal estate tax.
Federal estate taxes are also progressive, starting at 18% and going as high as 40%.
Trusts
Trusts are another important aspect of estate planning to consider, which have become more prevalent in recent years, as they allow you to transfer assets to your desired beneficiaries upon your passing. An individual, known as the trustee, is appointed to manage the trust’s assets; however, trusts can bypass the probate process altogether, dictate how much can be withdrawn, what the assets can be used for, and much more.
Unlike a conventional Will, there is more than one type of trust to choose from, depending on your needs and financial goals.
– Revocable Trusts: Revocable trusts give you the freedom to remove assets or beneficiaries and even change terms that dictate its management. Though revocable trusts offer more freedom, there are some drawbacks; revocable trusts are not shielded from creditors and can be liquidated to satisfy court judgments.
– Irrevocable Trusts: Irrevocable trusts lack the freedoms of a revocable trust, as benefactors surrender ownership and control of the assets. Benefactors are disabled from removing assets or beneficiaries; however, irrevocable trusts are shielded from most court judgments. Additionally, irrevocable trusts offer certain tax advantages that Wills and revocable trusts lack.
Additionally, utilizing a trust allows for a “curtain” between you and your beneficiaries. Besides your appointed trustee, it is your decision whether to disclose to your relatives which assets are in the trust and who is entitled to which asset.
There are other notable advantages to using trusts, including:
- Custom Provisions: One major advantage to implementing a trust in your estate plan is the ability to create trust agreements for your beneficiaries. You can set an age requirement for your heirs, limit how much money can be withdrawn yearly, and even dictate what the funds are used for.
- Avoiding Probate: Assets held in a trust are not included in the probate process, meaning the courts are not involved in distributing your assets. This is important as it allows your beneficiaries to receive their portion of the assets without spending months or even years in court. This is particularly crucial for individuals with minor children- who may be financially restricted. Additionally, probate records are public and can be accessed by others; by utilizing a trust, you and your beneficiaries’ financial matters will remain private. Click here for more information about the Probate Process.
– Out of State Property: Utilizing a trust is advantageous for individuals who own out of state property. Out of state property could be real estate or personal property that is titled out of state. With a conventional will, owning out of state property will require an Ancillary Probate Proceeding in the state where the property is located in order to sell the property; Ancillary Probate Proceedings add to the time it takes to complete the probate process and can require in-person hearings. Utilizing a trust allows your beneficiaries to bypass an Ancillary Probate Proceeding.
Additionally, “pour-over wills” can be used to address any assets that are left out of the trust. Pour-over wills contain provisions that transfer assets to a previously existing trust upon death which allows you to avoid the probate process entirely.
Health Care Proxy & Power of Attorney:
Executing a healthcare proxy as part of your estate plan is essential but often overlooked. Healthcare proxies allow you to appoint an individual to make healthcare decisions on your behalf if you are incapacitated or otherwise unable to make these decisions on your own.
A Power of Attorney allows you to appoint an individual to make decisions on your behalf that aren’t related to your health. It is possible to execute a limited power of attorney for matters like real estate transactions. However, a general power of attorney will grant the appointed individual the same decision-making power over your affairs as you do.
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Although you may not want to think about the possibility of passing away, proper estate planning is crucial. Not only does it provide a safety net for your loved ones, but it also ensures that your wishes are carried out after your departure and streamlines the process. By working with an estate planning attorney you can create a unique estate planned tailored to your needs and make sure your affairs are taken care of once you are gone.
The estate attorneys at Pryor Law have decades of experience in both estate planning. We can help you create a strategic estate plan that meets your individual needs and ensures that your wishes are appropriately carried out after your passing. Contact us to discuss your estate planning needs.
Is Estate Planning Necessary?
Absolutely. Regardless of whether you choose to use a will, trust, or both, an experienced estate attorney will ensure that your estate and its corresponding legal documents are properly drafted and executed. The experienced estate attorneys at Pryor Law will take the appropriate steps to ensure your estate is handled properly, including:
- Determining the value of your assets and liabilities, including any property
- Naming beneficiaries
- Naming a health proxy
- Giving a spouse or child power of attorney
- Utilizing strategies to avoid probate, including trusts
- Minimizing estate taxes
- Ensuring your estate’s taxes are paid
- Reviewing and update your estate plan when necessary
- Reviewing your insurance policies
- Handling any other affairs regarding your estate
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Pryor Law
292 City Island Ave., Bronx, NY 10464
Phone: 718-829-0222 | Email: info@pryorlaw.com
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