One of the biggest mistakes that people in New York make is that they do not create estate plans, which may include wills or trusts. People who have created wills also often make the mistake of not keeping their executors and beneficiaries updated. In addition to taking time to update their wills, a couple of other tips may help people to effectively engage in the estate planning process during the current tax season.
Various events might point to the need to review one's will. For instance, going over a will may be necessary if one's family experiences significant changes through marriage, divorce, birth or adoption, or if one's finances change substantially. Other events that may spark the need to review a will include the sale of assets mentioned in one's will, the benefactor relocating to a different state, or the need to change the guardians for minor children.
Besides updating a will, it is wise to create a comprehensive letter of instructions regarding it. This informal document lists the location of one's essential assets and papers. Examples of these important assets include 401(k)s, Roth IRAs or other retirement plans. A living trust may also be a helpful component of an estate plan because it allows one to transfer property directly to an heir in a way that is relatively painless and simple, avoiding the headaches of the probate process.
Without an estate plan in New York, a person's assets will pass based on the intestacy laws of the state. Having no estate plan means that his or her estate will unfortunately be burdened with administrative taxes and expenses that could have been avoided. Proper legal guidance can help people to efficiently prepare wills or set up trusts and then stay on top of their estate plans going forward.
Source: accountingweb.com, "Estate Planning Reminders for This Tax Season", Julian Block, Feb. 8, 2016