The Documents You Need for Your Estate Plan

The Documents You Need for Your Estate Plan

Whether you are thinking about creating an estate plan or already have one in place, it is important to ensure you have the proper documentation. Unless you have a law degree, understanding estate planning can be confusing.

In this DIY age, you may be inclined to try and create your estate plan on your own via the internet. Don’t. In fact, without an effective estate plan and proper documentation, your future heirs may suffer and your last wishes may not be upheld.

Following are the documents you need to ensure your legacy is preserved:

1. A will — For many people, this is the be all/end all of estate planning – the holiest of holy documents and the only one seen as worth having. A will is indeed vital to your estate plan as it provides instructions on how your property and assets should be disposed of and who your beneficiaries should be. In your will, you may describe how you wish to be buried, what charities you wish to donate to, who should care for your pets, and more. Additionally, your will allows you to name an executor to handle the administration of your estate after your death. Without this document, your estate is subject to New Jersey’s intestacy laws.

2. A health care proxy — A health care proxy is a document that names a trusted individual to make decisions about your health should you become unconscious or mentally disabled. No one wants to imagine what might happen to their loved ones if they should fall into a vegetative state or suffer from a terrible illness like dementia. Yet considering such possibilities and setting up a health care proxy is important to ensure your family knows your wishes should something happen to you.

3. Durable Power of attorney — Unfortunately, many estate planners stop at their will. While your will is extremely important to your estate plan, the buck doesn’t stop there. What if you should become incapacitated via accident, injury or illness? Who will handle decisions about your healthcare and finances? With a durable power of attorney, you name a trusted person who takes care of things like paying your bills, making medical decisions or handling your investments.

No two estate plans are the same. Your estate plan reflects your life, your estate, your assets and the legacy you wish to leave behind. Depending on your unique situation, your plan may be more or less complicated.

For more information about estate planning in Union or Hunterdon County, consult with Alec Borenstein, Esq., a partner with the firm at alec@bmcestateplanning.com or call 908-236-6457 today.

What to Leave Out When Making Your Will

What-to-leave-out-when-making-your-will-Hunterdon-County-New-Jersey-Union-County-New-Jersey

So you’ve finally decided to sit down and draft your Will. While you should be applauded for your effort, what you may not realize is what you leave out of your Will can be just as important as what you include.

Having a sound Will in place is important because it tells your surviving loved ones how your property and assets should be disposed of after you’re gone. Without a Will in place, your estate falls under New Jersey’s intestacy laws. Many people assume that by creating a Will, they can distribute their property and assets with impunity. However, depending on your situation, you may have certain assets or properties that are already bequeathed to another beneficiary.

One common example is joint tenancy property. Let’s say you and your brother own a piece of property together. When drafting your Will, however, you request that your ownership pass to your spouse. Upon your death, by law, your interest in the joint tenancy property would pass to your brother and not your spouse despite your Will requesting otherwise.

Another similar example is life insurance. If you already have a beneficiary to your life insurance policy, stating in your Will that you would like another person to be your beneficiary is a futile effort. According to the law, you already named a beneficiary — your Will cannot invalidate your policy and designate a new beneficiary.

Avoid leaving gifts for unlawful purposes

When leaving a gift in your Will, do not include unlawful instructions regarding how the gift should be used. For example, you would be unable to leave your Malibu home to your nephew under the condition that the home only be used for trafficking drugs.

Leave funeral instructions out of your Will

If you have detailed instructions about how you wish to buried, you aren’t alone. However, you should resist the urge to include funeral instructions in your Will. Why? Because most estates and probate proceedings aren’t dealt with until after the funeral, making your extensive and well-thought out funerary guidelines of little use to your heirs. Instead, simply talk to your loved ones about how you wish to be buried.

For more information about what you should and should not include in your will, consult with an experienced estate planning attorney today. Contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457 for assistance with estate planning matters in New Jersey and New York.

Understanding New York Estate Administration

Any type of legal matter should be handled by an experienced attorney, especially estate planning. After all, estate planning is about the legacy you leave behind to your loved ones. In the event that you need help probating a will in New York, you should familiarize yourself with the State’s administration and probate basics. By having a general understanding of how the process works you will be better prepared when you meet with your estate planning attorney.

Some basics

Unless you are an attorney or have already been involved in estate planning, many of the legal terms used in the process may be confusing for you. First, you should know that when we talk about an “estate,” we are discussing a legal entity that holds the assets, rights and obligations of a deceased person.

Additionally, you should be aware that probate is the process by which the NY Surrogate court validates a last will and testament. In many cases, people try to avoid probate to save time and money and to maintain privacy. Should no will exist, the descendant’s estate will be disposed of through administration proceedings following state intestacy laws.

Administration proceedings

When you die in New York without a will, the State must appoint an administrator to handle the distribution of your estate. According to N.Y.

statute, an administrator is chosen in the following order:

  1. The spouse of the deceased;
  2. If no spouse exists, then it passes to the decedent‘s children;
  3. If the descendent has no children, then it passes to decedent’s mother/father;
  4. Should the descendent have no surviving parents, the decedent’s sisters or brothers are next in line;
  5. The grandparents may be appointed if none of the above individuals exist.

If more than one person is eligible, they must settle the dispute and choose an administrator. Any disputes that remain unsettled will be handled by the Surrogates court. It is important to understand that the administrator has many responsibilities including, but not limited to:

  • Locating and gathering all estate assets;
  • Opening an estate account;
  • Managing estate assets;
  • Acquiring an estate identification number from the IRS;
  • Paying any estate taxes that might be due;
  • Paying any debts owed by the decedent;
  • Distribution of the remaining estate assets.

Like all areas of law, estate planning can become very complicated very fast. For experienced guidance with an estate planning matter in New York or Union or Hunterdon counties of New Jersey, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457 today.

What are Your Responsibilities as an Estate Administrator in New York State?

Testamentary-Capacity

Contrary to what you may have heard, an administrator is not the same as an executor. An executor is a person named in a will to carry out the descendant’s last wishes. The job of the administrator, on the other hand, is to ensure the estate of the descendant is processed in accordance with the state’s intestacy laws. In addition, an administrator is appointed by the Surrogate Court in the event that no will exists.

If you are appointed administrator of an estate in New York, your first move should be to contact your attorney. Your lawyer can explain the process and guide you through the necessary steps. Following is a basic checklist of tasks you’ll want to take care of immediately:

  1. Identify and list out the decedent’s assets.
  2. Contact financial institutions and notify them of the death and that you have been appointed administrator of the estate.
  3. Have real and personal property, including furniture, jewelry, art, collectibles, automobiles, etc., professionally appraised.
  4. Open an estate checking account.
  5. Find out if there are creditors of the estate and if their claims are valid. If their claims are valid, consult with your lawyer on how to proceed.
  6. Pay off all estate expenses including court fees, appraisal costs, funeral expenses, attorney fees, etc.
  7. Create a journal and record all financial transactions related to the administration of the estate.
  8. If required, be sure to have the decedent’s last income tax return and estate income tax returns organized and filed.
  9. Distribute the balance of estate funds to the surviving beneficiaries.

It is important to remember that you are appointed by the court and you should take your responsibilities as an estate administrator seriously. If state or federal taxes are owed on the estate, be sure to file them correctly and on time. A failure to do so may result in penalties against you.

Recently appointed executor/administrator of an estate in NY or New Jersey? Without proper legal guidance, you could find yourself in over your head. An experienced estate planning lawyer can assist you in obtaining and filling out paper work, understanding the probate process and creating an estate plan of your own. For estate planning help in Union and Hunterdon Counties, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908-236-6457 today.

N.Y. Estate Tax

N.Y.-Estate-Tax

The estate tax rate in the state of New York is between 5 and 16 percent depending on the value of your estate. If you are the administrator of an estate in New York, you should be aware that you must file your estate tax within nine months of the decedent’s death. You must file a New York State estate tax if the amount of the federal gross estate, combined with any includible gifts, exceeds the basic exclusion amount applicable at the date of death.

Currently, the exemption limit in New York for the estate tax is $3,125,000. Recent legislature signed by Gov. Cuomo on April 1, 2014, however, will increase the exemption amount each year until it reaches the federal limit.

The exemption schedule is as follows:

  • Deaths as of April 1, 2014 and before April 1, 2015 = $2,062,500.
  • Deaths as of April 1, 2015 and before April 1, 2016 = $3,125,000.
  • Deaths as of April 1, 2016 and before April 1, 2017 = $4,187,500.
  • Deaths as of April 1, 2017 and before January 1, 2019 = $5,250,000.

By January 1, 2019, the state exemption limit is expected to reach the federal limit, which is projected to be $5.9 million.

NY taxes the entire estate!

You read that right. While most states tax the amount over the exemption limit, New York taxes the entire value of the estate. In New York, if the estate is valued at $3.75 million, the entire $3.75 million is taxed — not the $650,000, which is the amount over the exemption limit. Even the federal government only taxes the amount over the exemption limit.

Marital deductions

Any property you bequeath to your spouse is exempt from both federal and state taxes, regardless of the amount. Depending on the total value of your assets, you can gift property to your spouse to reduce the value of your estate to below the exemption limit. However, there are various legal and financial reasons you should never leave all your assets to your spouse.

When it comes to estate planning, the larger the estate, the more complicated the issues. An experienced attorney can help you navigate the legal system. Whether you would like to set up your own estate plan or need help with the NY probate process, a skilled lawyer can help. To discuss your estate planning matter today, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com, or call 908-236-6457.

By at .

1 2