Estate planning is not only planning for the distribution of your property when you pass away, but planning to manage property and situations during your life. We answer some of the common questions that we have been asked regarding estate planning.
Which is better in an estate plan, a will or a living trust?
Both the living trust and a will are used to transfer property when you pass away, in fact, a living trust is also known as a will substitute. A trust, however, allows you to realize other objectives that a will cannot, but it may cost more to create a trust than to draft a will.
Whether or not a living trust is better for you than a will depends on whether the additional advantages of a living trust, such as avoiding probate, are worth the cost. An estate planning attorney can best advise you what’s best for your estate plan, as one size does not fit all and factors such as the size of the estate, your objectives and your family should be considered.
Can I avoid estate planning by gifting my property before I die?
Estate planning is more than just passing property after your death, it also involves managing property and meeting family goals later in life. Furthermore, gifts may be a viable estate planning tool, but there are limitations before reaching tax exempt limits. Simply giving away property may also cause an issue for those receiving the gift, as it may have negative tax consequences.
What is the right of election in New York and how does it impact my spouse?
The right of election exists when a deceased spouse leaves a Will that is admitted to probate by the Probate Court of New York, which is called Surrogate’s Court. For six months after the Will has been probated, the surviving spouse has the option to receive the greater of $50,000 or one-third of the estate under probate outright (as opposed to receiving it in trust) regardless of what the Will provides for the spouse. This is known as the elective share. When the Will leaves more than the elective share of the estate to the surviving spouse, he or she would not exercise the right of election; therefore, the right of election is valuable only if the Will leaves less than the elective share of the deceased person’s estate to the surviving spouse.