An Introduction to Estate Planning and Probate
An Overview of Wills, Trusts and Estate Administration
Wills and Trusts – An Overview
Imagine you are between thirty and fifty years old. You own a nice four-bedroom house in a decent neighborhood. You have two or three wonderful children. You have life insurance, decent health insurance, and a modest retirement plan. You have some money saved, but not enough to retire. You work hard and are involved with your children’s activities. You are a busy responsible parent, but you don’t have a lot of extra time or money. Why do you need a will, trust, or estate plan? An experienced estate planning attorney can answer that question, as well as others you may have about your family’s financial future.
Imagine you become ill or are seriously injured. Imagine you are so ill that you rely on a respirator and are fed intravenously for years. While you are ill your assets are used to help pay for health care you never wanted. Any additional assets you own are untouched. Your investments are not watched and your taxes are not paid. Your minor children are given a court appointed guardian you have never met.
A Users Guide to Probate
Probate is the court-supervised process of winding up your affairs after death. Many people associate probate with large costs and even bigger hassles and think that the smart thing to do is to avoid probate. Contrary to this popular belief, the probate of most estates runs smoothly. The court’s supervision ensures that your outstanding debts, taxes, and claims against you are paid and that your remaining assets are divided among your heirs. Attorneys experienced in probate-law can explain the probate process whether you are planning for the future or involved in probate right now.
When you die with a will, or testate, the court makes its decisions regarding the winding up of your assets using your will as a guide. When you die without a will, or intestate, the court and the state make those decisions for you.
Why You Shouldn’t Die Without a Will
Wills are the most basic element of estate planning. A will is a legal document that explains how you want your property and assets distributed after you die. It allows you to say who you want to carry out your wishes and gives you a chance to nominate a guardian for your minor children. A will gives you the last word upon your death Despite the control a will gives a person, about half of all Americans die without one. If you have questions about whether or why you need a will, an experienced estate planning attorney can help.
When you die without a will, you die intestate. If you die intestate the laws in the state where you live control distribution of your assets. The state may appoint a lawyer to oversee the distribution of your estate and that lawyer will be paid out your estate’s assets. The state may even claim your property if you have no apparent heirs. If you do have heirs, they may be forced to pay sizable taxes in order to keep the property you have left behind. The state will also appoint a guardian for your children without any input from you.
Planning for Death and Taxes
When you die, the assets and property interests you leave behind are your estate. Every state has a court-supervised process for winding up your affairs and distributing the property left in your estate. This process is known as probate. Some of your estate may be excluded from probate through the use of joint property rights or the designation of a beneficiary on life insurance or pension plans. Thus, your probate estate might be quite small. Despite the size of your estate, probate can be a complicated process. If you want to minimize the complications for your survivors, or if you are in the midst of probate right now, an experienced probate lawyer can answer your questions and put your mind at ease.
New York Trusts 101
Many people think that trusts are only useful for the very wealthy. However, trusts are a great estate planning tool for anyone who wants to avoid the costs associated with probate, avoid paying some death taxes, and provide limitations on their young children’s ability to access money left to them. Attorneys experienced in probate-law can explain trusts and other estate planning tools and help you plan for the financial future.
A trust is a legal property interest held by one person, called the trustee, for the benefit of another person, called the beneficiary. The person establishing the trust is called the grantor. A trust can be revocable or irrevocable.
- Revocable trust: A revocable Trust is one that can be changed or terminated by the grantor at any time and for any reason.
- Irrevocable trust: An irrevocable trust, once established cannot be terminated or altered for any reason.
Wills and Trusts Resource Links
An introduction to the topic of Estate Planning.
This Federal Consumer Information Center provides information on planning your estate. The article is produced by Metlife Consumer Education Center and is reviewed by the Division for Public Education of the American Bar Association and the Legal Services Corporation.
An overview of issues related to wills.
Frequently Asked Questions about Wills and Trusts
Q: What Is Probate?
A: Probate is a court-supervised process that includes:
- Evaluating and deciding on the validity of your will (if you have one).
- Gathering all of your assets, making an inventory of those assets, and having the assets appraised.
- Paying your outstanding expenses, debts, and taxes. These are generally paid in the following order: costs and expenses involved with the administration of your estate, funeral expenses, debts and taxes, then all other claims, including will distributions.
- Distributing the remaining assets to the person(s) entitled to them.
Q: What Assets Are Included In My Probate Estate?
A: The assets that are included in your estate for purposes of probate are called your probate-estate. Probate-assets include solely owned property as well as your interest in jointly owned property, collections, antiques other miscellaneous household items, including cars, and the value of any life insurance policies, trusts, annuities, and/or retirement plans payable to the estate. The fact that your probate-estate is small does not necessarily mean that your taxable estate will be as well. Remember, just because an asset is not part of your probate-estate does not mean that it is not part of your taxable estate.
Contact Our Offices
The Law Offices of Schlissel DeCorpo has offices in Lynbrook, Queens, and Suffolk County, and we represent individuals facing foreclosures throughout the New York metropolitan area, including Long Island, Nassau County, Suffolk County, Westchester County; and NYC’s five boroughs of The Bronx, Brooklyn, Manhattan, Queens, and Staten Island.