What are the top estate planning mistakes in New York?

What are the top estate planning mistakes in New York?

On Behalf of | Feb 18, 2023 | Estate Planning

More people now realize the importance of an estate plan, but some are making mistakes in setting theirs up. Common mistakes that testators make in New York are forgetting to update it and failing to recognize the full financial implications.

Setting it and forgetting it

Estate planning isn’t something that you set once and forget about, regardless of how certain you feel about your wishes. Laws may change that would cause an issue with your will. Life can sometimes throw you surprises, such as a fallout with a loved one or an unexpected grandchild.

Ignoring tax and debt implications

Taxes and debts could interfere with your envisioned way of distributing your assets, which would make estate administration take longer after your death. Before anyone receives their inheritance, the executor of the estate must allow creditors to stake their claim within a certain time frame. New York charges an estate tax if your total estate value exceeds $5.85 million. At a federal level, there’s another tax on estates over $11.58 million. With the right strategies, you could reduce or eliminate estate taxes.

Invalidating the estate plan

Each state has certain rules to follow for an estate plan to be valid. A will is only valid in New York if you sign it in front of at least two witnesses who don’t benefit from your will. New York requires that wills are in writing. You must state to the witnesses that you are signing your will and then ask them to verify your signature, sign and write their addresses.

Leaving money but not a guardian behind for minors

Minors in New York can’t use their inheritances until they are adults. If you want to ensure that your children have their needs met, then you need to formally assign a guardian for them. Obtaining a life insurance policy is another way of ensuring that your family has money to cover their living expenses after your death. Remember that it’s possible for both parents to die at the same time in an accident, which is why it’s so important to choose a guardian.

Planning for one’s death isn’t the most pleasant task for many people, but it’s necessary to reduce the stress your loved ones will go through. Correctly setting up your estate plan prevents family conflict and your wishes not being abided.

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