Planning your estate may seem like a simple do-it-yourself (DIY) task in New York, but you risk making costly mistakes and suffering unintended consequences by choosing this route. You may not know the intricate details and legal considerations in setting up a will and estate plan to fulfill your wishes. The following sheds some light on why DIY wills can be a bad idea.
State-specific paperwork
An estate plan requires a series of documents and legal arrangements to carry out your directives about managing and distributing your assets upon your passing. These documents, and the requirements for a valid will, vary by state and must be completed accurately and according to your state’s laws. Any mistakes, missing documents or other issues will not likely surface until you are gone and can no longer rectify them for the sake of your heirs.
Some documents, such as a healthcare or financial power of attorney, may have standardized forms with clear instructions, allowing you to complete them independently. However, other estate planning tools may not be self-explanatory and do not lend themselves easily to a DIY estate planning project.
The complexities of a large estate
Many people immediately think only of wills when considering estate planning. However, larger estates with numerous assets and a higher value can present complex issues when transferring them to your heirs that a will alone may not be able to handle.
You might have multiple beneficiaries and have different preferences for each in terms of their inheritance. This issue becomes even more prominent if you have minor children who require additional provisions for their well-being if you meet an untimely demise.
You may need one or more trusts
Trusts are an essential estate planning tool used to transfer assets to beneficiaries in specific ways that offer tax savings, asset protection or other benefits that a will does not provide. You can bypass probate with a trust, saving court costs and enabling a faster transfer of assets to your heirs.
You can also protect assets from divorce, creditors and legal challenges in some cases. However, choosing and setting up the correct type of trust involves knowledge of trust types, research and some careful decisions.
While DIY wills and estate planning may work for some aspects, such as a healthcare directive, it is vital not to underestimate the potential risks of doing your estate plan. Understanding the complexities of estate planning tools, along with the tax and legal ramifications, may require help so that you can safeguard your interests and ensure the smooth transfer of your assets to your loved ones.