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By John M. Bigler This month's column will discuss the most common area of estate planning, the preparation of a will. Many clients ask whether they need a will. A will allows for you to designate who should receive your property after your death. A will also allows you to select someone to manage your estate and to insure that your assets are disposed of as you wish. The person appointed is referred to as the executor.
After death, if the deceased has a will, it is probated or filed with the Surrogate's Court. It is the job of the Court to approve the will and the appointment of the executor. Recently, there has been a great deal of advertising and publicity regarding the idea of avoiding probate. Many people are under the misconception that by avoiding probate they will avoid estate taxes or avoid the administration of the estate. Not so. If one dies administration proceeding is still required so that an administrator can be appointed by the Court. There is a common misconception that if one dies without a will that the State will take their assets. Also not true. In New York State, under its intestacy laws, a determination will be made by the State as to who receives assets. The assets will be distributed to immediate relatives based on their relationship to the deceased. However, the assets may not pass to those who you intended as beneficiaries.
In New York State you can give away $115,000.00 during lifetime or at death without having to pay New York estate taxes. The federal government's ceiling is $600,000.00. Couples who have more considerable estates may, through proper estate planning significantly reduce their federal estate taxes, which can be steep. A marital trust will allow the couple to preserve twice as much of their assets before being subject to federal estate taxes. Another alternative is giving away $10,0000.00 to any number of people per year in order to be excluded from federal and New York State gift tax. It's important to note, however, that this gifting does not exclude an individual from avoiding the scheduled penalties in Medicaid planning. Assets that have been designated to a specific beneficiary outside of the will will automatically be distributed to that beneficiary without passing through the will. This is commonly known as a will substitute. Joint accounts, accounts held in trust for another, assets with a designated beneficiary such as an insurance policy or an IRA are also examples of will substitutes. In conclusion, a will can be a helpful planning tool in the sense that you can rest assured that your assets will be distributed according to your personal needs. Although in some particular situations it is not necessary to have a will, it always makes sense to at least consider whether you would benefit from having a will so as to avoid unexpected consequences. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
A will also allows you to appoint a guardian for children under the age of eighteen and also to appoint a trustee to handle assets inherited by minor children. Proper estate planning through the use of a will can save thousands of dollars in taxes for those with more sizable estates. A will can also provide special protective clauses for disabled members of ones family. The will allows specific gifts of either liquid assets or personal property.
Setting up a living trust, either revocable or irrevocable, during one's lifetime, and placing assets in the trust will avoid the need for probate for those assets. Regardless of what the will says, the assets in the trust will pass as per the directions in the trust. In New York, the State Surrogate's Court which handles wills and trusts is very efficient thereby reducing the necessity of setting up a trust in order to avoid probate.