Many people make the mistake of thinking that estate planning is just about protecting wealth and distributing property. Those are often important goals of estate planning, but they are not the only reasons to have an estate plan. There are other reasons to have an estate plan and other goals that you can accomplish with an estate plan. In fact, the other goals are often far more important than wealth and property.

If you have children, you can use an estate plan to determine who should have guardianship over your children in case something happens to you. Whose custody you leave your children in is usually far more important than how much money you leave your children. However, if you do not have an estate plan, you will not be the person to decide who will take care of your children.

An estate plan also sets out who takes care of you and your property if you become incapacitated. If you are in the hospital, for example, someone might need to make health care decisions for you. As part of your overall estate plan, you can decide who has the authority to do so.

Do not make the mistake of thinking that just because you do not have a lot of property you do not need an estate plan. Property is important to estate planning, but it is not the most important thing.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

A question that often comes up in estate planning is “How much money do you need to get a Trust?” The question is a fundamental misunderstanding, but a common one. Although there would not be much point in doing so, you can put as little as a single penny into a Trust.

The question is based on the premise that Trusts are designed for rich people. It’s a false premise. Trusts are designed for anyone who either wants to give something for one person to manage for the benefit of someone else or who wants to have their estate avoid Probate. Imagine that you have a minor niece that you want to leave a thousand dollars to. That’s a lot of money for most children and they can be expected to want to blow it as soon as possible. Instead of giving it to your niece directly, you can put it into a Trust. It can earn interest and be made available to your niece when she comes of age.

Trusts are also a great way for everyone to avoid having their estate pass through Probate. If you put all of your assets into the Trust, those assets will be divided according to the terms of the Trust without court intervention. It does not matter how much you have. If you have something, you can use a Trust.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

If you have young children, it is important that you name someone to be the guardian of the children in the event that you pass away. To do this, you need to make a Will. An estate planning attorney can help you make a Will. However, you need to choose an appropriate guardian. Here are a few tips.

The most important thing is to pick someone who is responsible and willing to serve as guardian. You want someone you know who will raise your children appropriately. That might be a family member or it might be someone else. You should also speak to that person ahead of time and make sure that he or she is willing to raise your children if anything should happen to you.

In most cases, the court will appoint the person you designate to be the guardian. However, sometimes the court might have a good reason not to. Because of something you do not know about, the person you chose might not be an appropriate person to raise your children. For this reason, you might want to also consider appointing a backup guardian. That is someone the court can appoint if the first person cannot be the guardian.

An estate planning attorney can create a Will that designates your choice for a guardian of your minor children and your backup choice.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

There are many different reasons you may want to create a living trust, and your attorney may decide to supplement your will with a living trust. However, in most cases, a living trust does not replace the need for a will. Your attorney may decide that creating a living trust is essential to your overall estate planning needs.

A living trust does not have to go through probate, and your living trust is not a part of public record, as your will is. A living trust may be a good idea to help you address setting aside enough money for a child or incapacitated adult who is unable to take care of her own finances. You can give your trustee specific instructions for distributing money to a guardian to address those special concerns.

Your attorney may decide that a living trust is unnecessary to meet your estate planning goals because other instruments, such as payable on death accounts, may address them. After discussing your needs with your estate planning attorney, your attorney can discuss the benefits with you. You can contact our office today to discuss whether a living trust is appropriate for your individual estate planning needs. If you contact our office we can help you determine the costs and benefits of creating a living trust as part of your estate planning documents.

Check in with us tomorrow to read Part 3 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

A living trust allows the person creating the trust to set aside money or property within the trust for the benefit of others by appointing a trustee to administer the trust and ensure the trust property is distributed to the beneficiaries. If you are the person creating a living trust, you are known as the grantor, owner or settlor of the living trust. A living trust is also known as a revocable inter vivos trust.

A testamentary trust, on the other hand, becomes operative after your death, pursuant to your will. Testamentary trusts typically go through probate. A living trust earns its name from the fact that you as the grantor of the trust created it while you were alive and it becomes effective before your death. After your death, your living trust may continue to operate as long as you comply with the New York Estates, Trusts and Powers Law when creating one.

Your attorney may also decide to create a “pour-over” will that allows any other property to pour-over into your trust after your death. However, the property that may pour-over from your will into your living trust will still have to go through probate. It typically becomes public record as soon as your personal representative or trustee submits it for probate. In this case, your living trust and your will become part of the New York Surrogate Court’s public records accessible by public request.

Check in with us tomorrow to read Part 2 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

If you have young children (i.e. children under the age of 18), you need to carefully plan your estate to protect and provide for your children.  You’ll need the basic estate planning documents to protect yourself as well, with additional documents and consideration for your children.

• In your will, you name guardians to raise your children if you die.  Name back-up guardians as well in case your primary guardians are unable or unwilling to serve when needed.  Be sure to ask permission before naming them; it’s a huge responsibility and you want your children to be wanted.
• Don’t distribute assets to your minor children in a simple will.  Children are unable to inherit and if you try, the court will intervene and take over.  In addition, the children will get their full inheritance when they turn 18, which may not be a good thing.
• Instead, provide individual lifetime trust shares for your children in a revocable living trust.  These assets will be available for their health, education, and maintenance but can’t be taken by future creditors or divorcing spouses.  Your children can serve as co-trustees as they get older and learn about managing money, earning a living, and living within their means, with progressive levels of trustee responsibility.
• Execute a first responder authorization which appoints trusted friends and neighbors to stay with your children in an emergency, until your named guardians arrive.
• Because your will is only effective if you’re dead, you also need to appoint stand-by guardians in a separate document.  This guardianship authorization is effective if you are incapacitated, but alive, and unable to care for your children.

If you have young children, consult with a qualified estate planning attorney to best ensure that their needs are met and they are protected.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

While all adults need comprehensive up-to-date estate planning, the parents of young children have additional considerations and complexity.   Here are 6 estate planning tips for the parents of young children; if you have additional questions or concerns, consult with a qualified estate planning attorney.

1.  Write a Love Letter

The most important inheritance you can provide your children is your love; document it in a way that is a good fit for you.  For example, put your words down in a letter, make a photo album or a scrap book, or film a video.

2.  Make a Specific Gift

In your will, trust, or a personal memorandum, referenced in your will or trust, provide instruction for a specific gift of a special personal possession or family heirloom for each child.  Jot down why that possession is special and why it’s being given to that particular child.

3.  Appoint First Responders

Execute a first responder authorization which authorizes trusted friends and neighbors to stay with your children in the case of an emergency until named guardians arrive.  This avoids your children being placed into protective custody (i.e. foster care.)

4.  Name Lifetime Guardians in a Stand-By Guardian Designation

Because your will isn’t effective during your lifetime, the guardians you appoint in your will have no authority during your lifetime.  To avoid the cost, hassle, and time delay of court interference, grant authority to those same guardians in a stand-by guardian designation.  Not only does this prevent court interference, but it also prevents family discord and your children being placed into protective custody (i.e. foster care.)

5.  Appoint Guardians in Your Will

Name guardians for your minor children in your will; be sure to ask their permission, first, and to name contingent guardians, as well.

6.  Use a Trust

Minor children cannot legally inherit; therefore, use a revocable living trust with individual life-time trust shares for your children; you can provide financial guidance, prevent disinheritance, prevent disqualification from governmental assistance, protect against addictive disorders, and provide asset protection.

If you have any children under the age of 18, you need comprehensive estate planning, incorporating these 6 tips for the parents of young children.  Consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Every family is unique and should take the time to carefully consider their estate planning needs.  Taking the time to understand your own family’s needs will allow you to have a better plan in place.  Take a look at the following considerations, to see how you can improve your estate planning.  If you have any questions, or if you’re ready to start your estate planning affairs, contact an estate planning attorney.

• Do you have young children? If so, you need to make sure that you have a plan in place for their protection.  This includes choosing a guardian so they are always cared for (i.e. during any incapacity and after death.)  You should also consider the assets that you leave behind (i.e. you may need life insurance.)  You may want to utilize a trust so that you can ensure that the assets will be protected and used responsibly (i.e. minors can’t inherit outright and all beneficiaries need asset protection.)
• Do you have a family member with special needs? You will likely want to make sure that the assets that you leave for your loved one are protected.  You can use special planning techniques so that you’re able to contribute to your loved one’s care without sacrificing his or her ability to take advantage of Government benefits.
• Do you have a family member who is unable to manage his or her finances?  You can utilize estate planning techniques that allow you to protect the assets that you leave behind.  This can ensure that the assets are used for the right reason, and that your loved one is able to benefit in the right ways.

These are considerations that you will want to think through.  An estate planning attorney can work with you to fully understand your family’s needs.  You will be able to have the perfect plan in place for your entire family.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Many people don’t realize that minors can’t legally inherit property.  Naming a minor in your will or trust must be done with carefully crafted language.  If not, the court will intervene and take control of the gift.  As a result, much money and time are wasted.

It’s important to have a basic understanding of these 8 important, minor related, estate planning terms.  If you have questions or have a minor in your life, consult with a qualified estate planning attorney.

Minor

Any individual, age 17 or younger is a minor.  Even though they think they’re all grown up, they’re not.

Child’s trust

A trust created for a minor or young adult.

Custodian

No, it’s not the janitor.  A “custodian” is an adult named to manage property left to a minor under the UTMA or UGMA (i.e. Uniform Transfer to Minors Act and Uniform Gift to Minors Act.)

Descendent

Lineal offspring such as children and grandchildren are descendents.

Financial Guardian

The person either named in the will or appointed by the court to manage the minor’s property.

Guardian of the Person

The person either named in the will or appointed by the court to take care of and make decisions for a minor.  Such decisions include school, welfare, life-style, and medical decisions.  In other words, the guardians of the person are the people who raise the kids if the parents are disabled or deceased.

Pretermitted Heir

A child who is not named in or not provided for in a will.  Most states assume that if a child is not named, it is an error.  A pretermitted heir inherits his fair share.  If you wish to disinherit a child (or grandchild), you must explicitly do so.

Uniform Transfers (or Gifts) to Minors Act

The state law that regulates how assets can be transferred to a minor.

Do you have a minor that you care about in your life?  If so, be sure to consult with a qualified estate planning attorney when creating your estate plan.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.