Many New York residents procrastinate on creating an estate plan. However, a plan is necessary if the estate owner wants their final wishes to be carried out. The first step should be gathering financial records and getting a clear picture of all assets and debts. With this information, the estate owner can begin to move forward with a plan for how this property will be distributed among loved ones.
Although it’s not always possible in every family, ideally, estate planning would involve the entire family. The estate owner could sit down and discuss the plan and take suggestions from loved ones. It is important for key people to at least know where important documents are.
Some estate owners might wonder if they can just skip making a will and give everything away. While this may be technically possible, there are yearly tax-free limits to how much can be given to an individual and a lifetime tax-free limit. These tax exemption limits in 2019 for gifts are $15,000 per individual in a year and $11.4 million for a lifetime. However, if a person dies without an estate plan, the state will decide how assets are distributed. The estate owner may intend to distribute wealth as gifts, but an illness or injury could happen at any time. This is why adults of all ages need to have some kind of plan.
There are a few other important reasons to have at least some documents in place. Parents of minor children can use the will to appoint their child’s guardian. Without this, there could be a long court process, and the children could end up living with someone the parents might not have preferred. Estate planning also involves planning for becoming incapacitated. This can mean using powers of attorney to appoint someone to make financial and medical decisions. Legal counsel can help a client throughout the estate planning process.