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What is a will?
A will is a legal document stating how a person’s (the Testator’s) property should be distributed to his or her heirs upon the person’s death. For a will to be valid under New York law the person must have the intent to make the will and the will must be signed by the testator with two competent witnesses. Although drafting a will may sound and appear easy, especially because of new websites and “will-maker” software, it is not just a document, it is a plan with serious financial and personal consequences if it is not executed properly. We always recommend you contact an attorney when deciding to have a will drafted or prepared.
Why do I need a will?
It depends. Everyone’s situation is different and unique. When deciding if you need a will you should consider multiple factors such as if you own real estate, a car, jewelry or other personal items you want to give to certain people when you die. If you do not have a will then most of your property will be split up among your heirs according to laws called “intestacy laws”. The intestacy laws try to “predict” how you wanted your property divided, but if you wanted to give anything to a distant relative or a friend, they will most likely not be legally entitled to it. You should also consider who you want to be in charge of “settling” your estate such as a loved one, professional colleague or a friend. Having a will ensures your intentions are heard in court and are carried out as you planned.
If I already have a will, can I change it?
Yes. If you already have a will but want to change something in the will, an attorney can prepare a “codicil” to amend your will. However, there are necessary steps to ensure a codicil to your will is effective and valid. Contact an attorney if you want a will changed or amended in any way.
What is a trust?
A trust is an instrument created when a person called a "settlor" gives property to a person or entity called a "trustee" who holds, manages and protects the property for another person or entity called a "beneficiary". The trustee has "legal" title to the property but the beneficiary has "equitable" title to the property meaning they are entitled to the financial interest of the property held by the trustee. A trust may be created for any legal purpose not restricted by law. In most cases, third parties, such as creditors, cannot sue the beneficiary for the property of the trust, because the trustee is the one with legal title.
Why I should have a trust?
Trusts are powerful instruments and, as discussed above, are used to protect assets from third parties and to also limit tax liability during your life and also for your estate after you die. Setting up a trust to pay for life's necessities, such as education and health care, or skillfully crafting a trust to contain a life insurance policy can save significant amounts of money from a tax perspective. Additionally, placing property such as a house in a trust may not only lower your taxable estate, but it may also qualify you for government benefits.
Trusts are also used to control what and how much trust property a beneficiary may be entitled to at any given time. With a trust, you can be sure a beneficiary receives income for a specified amount of time or to be used only for certain necessities. Certain trusts are also designed to limit the beneficiary's ability to pass their interest onto someone else voluntarily, such as an annuity broker or sell their interest, and also involuntarily to a creditor or because of a lawsuit judgment or court order.
As you can see trusts can be very complicated and yet very effective at planning for your future as well as your family and friends. Using trusts in conjunction with a will can create a well thought out estate plan, but we highly recommend you speak to a qualified attorney when thinking about using a trust.
What property can I put into a trust?
At the time of creation of the trust, some form of property must be transferred into the trust. This could be almost anything from money, bank accounts, stock certificates, real estate, life insurance policies, or personal effects but the property must be able to be identified. You may be asking yourself "Why put these items in trust?"
Health Care Proxy
A health care proxy is a legal document which allows you to designate a person, usually a close friend or family member, to make health care decisions for you if you become incapacitated. Within the document you may also give directions about any treatment you may or may not want to receive. Health care proxies are usually provided at doctor's offices or hospitals where someone may be having surgery or a procedure. We can custom tailor a health care proxy for you, however the internet is a good source for a basic health care proxy such as here. Whatever your source is for a health care proxy, always be sure your proxy, the person you designate to make health care decisions for you, knows what your decisions and wishes are.
A living will similar to a health care proxy except instead of relying on your designated person, this document specifically sets out what treatments, procedures and protocols health care providers should follow. A lot of times living wills contain directions such as "do not resuscitate" orders, if feeding tubes and ventilators should or should not be used and the administration of life prolonging therapies. It is good to have both a living will and a health care proxy to ensure you are taken care of in the way you want. Living wills can be more complicated than health care proxies, but we are more than happy to assist you in planning for future decisions.
Durable Power of Attorney
Most people have heard of a "power of attorney". Power of attorney gives a person, the agent, the right to act on behalf of you, the principal. This agent may enter into financial and real estate transactions, contracts, access bank accounts and buy or sell property on your behalf. The "durable power of attorney" allows someone to act on your behalf just like a power of attorney if you become incapacitated. A durable power of attorney is a powerful tool which allows your financial affairs to continue if you are unable to make decisions. Because your agent effectively has the same power and control over your assets as you do, you should choose your agent very carefully. Lau & Nicolello, LLC are here to help you create your durable power of attorney and to also make your estate plan complete. If you would like any further information please click here.