Last Will and Testament
A will is a cornerstone of any effective estate plan. Your will determines who inherits your property, which includes financial assets as well as your personal possessions with sentimental value. However, assets such as bank accounts, investment accounts, and retirement accounts pass outside the will according to their previously determined beneficiary designations.
You need to have a will even if you don't have substantial assets. Your will names an executor for your estate. If you have minor children living at home, it also names a guardian who will care for them in the event of your death.
If you were to die without a will, your assets would be passed according to intestate succession rules. These rules generally allow your closest living relatives to inherit your assets. The court would appoint an executor for your estate and a guardian for your children.
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A trust is a tool that allows a third party, known as the trustee, to oversee assets on behalf of a beneficiary. Contrary to popular belief, trust funds aren't only for the very wealthy.
A trust can be used for a number of purposes. For example:
- Protect assets. Trusts are commonly used as asset protection tools because the assets contained in the trust are no longer legally owned by you. This prevents them from being seized by creditors or subject to legal judgments.
- Minimize taxes. Trusts can be used in conjunction with a will to minimize taxes, prevent your assets from going through the time-consuming probate process, and protect your personal privacy.
- Prevent mismanagement of assets. Leaving an inheritance in a trust allows you to have greater control over how your beneficiaries will spend the assets. This can be helpful if you are worried about spending decisions due to age, mental health concerns, addiction, or a past history of poor money management.
- Provide for a loved one with special needs. If you have a loved one with a physical or mental disability, providing an inheritance outright can jeopardize their claim to valuable government benefits. A special needs trust can pay for expenses that will improve their quality of life while still allowing them to access necessary healthcare services.
- Support charitable giving. If charitable giving is important to you, creating a trust can be an effective way to leave a lasting legacy for a cause that you support.
Please keep in mind that a trust is not a substitute for a will. A trust expands your estate planning options, but you will still need to create a Last Will and Testament.
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Power of Attorney Documents
Estate planning isn't only about what happens after you die. If you become incapacitated due to illness or injury, power of attorney documents give the person of your choice the legal authority to make decisions on your behalf.
There are two types of power of attorney. A financial power of attorney gives someone the authority to pay bills, deposit checks, file taxes, manage investments, and make other financial decisions on your behalf. A health care power of attorney, also known as a healthcare proxy, grants the authority to oversee decisions related to your medical care. The person who has your health care power of attorney will make decisions based on the guidelines you've established in your living will and other advance care directives.
Contact Our Brooklyn Estate Planning Attorneys Today
Experienced estate planning attorney Theodore Alatsas can create your estate plan or update your existing documents to ensure they still fit your needs. Once your initial plan has been created, it is a good idea to review your documents every three to five years to ensure they are still appropriate. Life events such as a significant increase or decrease in income, marriage, divorce, and the birth or adoption of a child can all affect your estate plan. Changes in tax laws may also necessitate an update of your documents.
Our firm is conveniently located for residents of Brooklyn, Queens, and Staten Island. Our ground floor office is handicapped accessible with a subway stop and two bus lines nearby. We know that dealing with legal issues affecting your family can be stressful, but we will proactively work to provide you with peace of mind as you move forward. Contact us online today to schedule a free, no-obligation initial consultation, or call us at 718-233-2903.