Law Offices of Juliet Cohen, P.C.

Elder Law, Trusts and Estates, Probate & Administration

Common Questions About Estate Planning

    • What is estate planning?

    • Estate planning involves creating a plan to manage your assets in the event of your death or incapacitation. It ensures that your property, investments, and personal belongings are distributed according to your wishes. It also allows you to appoint individuals to make healthcare and financial decisions on your behalf if you become unable to do so. Common documents used in estate planning include wills, trusts, powers of attorney, and healthcare directives.

    • Why is estate planning important?

    • Estate planning helps ensure that your assets are distributed as you wish and that your loved ones are taken care of after your death. Without an estate plan, state laws will dictate how your assets are divided, which may not align with your preferences. Additionally, estate planning helps minimize probate costs, reduce estate taxes, and avoid family disputes. If you have minor children, it allows you to appoint a guardian for their care.

    • What’s the difference between a will and a trust?

    • A will outlines how your assets should be distributed after death and names an executor to manage the probate process. Wills must go through probate, which can be time-consuming and expensive.

      A trust, by contrast, is a legal entity that holds and manages assets for your beneficiaries. Trusts generally avoid probate, leading to faster and more private asset distribution. Trusts also offer more control over how and when beneficiaries receive assets, making them useful for long-term planning or for beneficiaries with special needs.

    • What is probate, and can it be avoided?

    • Probate is the court-supervised process of validating a will, settling debts, and distributing assets to heirs. It can be time-consuming and costly. Probate can be avoided through tools like:

      • Revocable living trusts, where assets bypass probate.
      • Joint ownership with rights of survivorship, where assets automatically pass to the surviving owner.
      • Payable-on-death (POD) or transfer-on-death (TOD) accounts, which transfer assets directly to beneficiaries without probate.

    • What are the tax implications of estate planning?

    • In New York, estates exceeding $6.58 million (as of 2024) may be subject to state estate taxes, while federal estate taxes apply to estates valued over $12.92 million. Estate planning strategies, such as gifting assets, creating trusts, and charitable giving, can help reduce or avoid estate tax liabilities.

    • Who should I name as the executor of my will?

    • The executor manages your estate after your death, ensuring debts are paid, and assets are distributed according to your will. Choose someone trustworthy, organized, and capable of handling financial matters. It’s important to discuss this role with them beforehand to ensure they are willing to take on the responsibility.

    • How often should I update my estate plan?

    • You should review and update your estate plan regularly, especially after major life changes like marriage, divorce, the birth of a child, or a significant financial shift. Laws also change over time, so periodic updates ensure your plan remains current.

    • What happens if I don’t have an estate plan?

    • If you die without an estate plan (intestate), New York’s intestacy laws determine how your assets are distributed. These laws prioritize your closest relatives, but the process may not align with your wishes. Without a plan, the probate process can become more complicated, leading to family disputes, delays, and additional costs.

    • What is a power of attorney, and why do I need one?

    • A power of attorney is a legal document that allows someone to make financial or legal decisions on your behalf if you are incapacitated. Types of power of attorney include:

      • A durable power of attorney, which remains in effect if you become incapacitated.
      • Limited power of attorney, which grants specific powers for a limited time or purpose.

      A power of attorney ensures that your financial affairs are managed if you’re unable to make decisions yourself.

Conclusion

Estate planning is essential to protect your assets, care for your loved ones, and ensure that your wishes are carried out after your death. Whether you need a will, trust, or both, the Law Offices of Juliet Cohen, P.C. can help you create a comprehensive estate plan tailored to your unique needs.

Speak to an Attorney

Contact the Law Offices of Juliet Cohen, P.C. for advice on estate planning. Our experienced attorneys can help you develop a personalized plan that safeguards your assets and provides for your family’s future.