New York Estate Planning Lawyers

It is crucial to have not only an inventory of your current assets, but also a projection of how your investments and your spending during retirement will affect your estate. Your own potential long-term care needs should also be considered. When you have an estimate of what you will need during your lifetime, you can create a will that directs the distribution of your remaining assets to your heirs and beneficiaries. Consulting with an experienced estate planning attorney is an indispensable part of the process, as we are aware of the most common pitfalls and can present you with the best solutions to carry out your wishes.

There are many reasons why you may wish to include one or more trusts in your estate plan. While a will provides for direct distribution of your assets, a trust is a way to hold property for the benefit of another person. The creator of the trust designates a person known as the trustee to manage and distribute the assets for a beneficiary.

When a trust is created by a will, it is known as a testamentary trust. Your will can direct that some assets be distributed directly, and others be put into trust. This may be useful when you have heirs who cannot manage the money on their own, for instance because they are too young or because of a disability. In your will, you can instruct a trustee to manage funds responsibly and make appropriate distributions to the beneficiary.

Trusts can also be created during your lifetime. A revocable living trust can be formed while you are alive to allow a trusted person to manage your affairs, even if you become incapacitated. You can also place your major assets in such a trust, so that your trustee can distribute them according to your instructions directly from the trust after your death, without the need to wait for the process of probating your will.

Establishing trusts for different purposes

Trusts can take different forms and can be used for several purposes. Special needs trusts can provide for a family member with a disability while protecting their eligibility for public benefits. Asset protection trusts can keep resources safe from future creditors. Spendthrift trusts safeguard assets from young adults who have not yet developed good money management skills. Bypass trusts can help wealthy New York families keep the state estate tax exemption of the deceased spouse for the surviving spouse. Charitable remainder trusts take advantage of tax deductions to make an irrevocable charitable gift, while also benefiting a non-charitable beneficiary.

Families with significant wealth may be affected by the estate tax and will naturally seek strategies to reduce their tax burden.

The federal estate tax exemption amount is $13.61 million per person in 2023, and it is portable from one spouse to another, so a married couple can shield $27.2 million from the tax. Estates above that amount are taxed at 40 percent.

New York State has its own estate tax. The exemption amount is currently significantly less than the federal exemption amount. Two important aspects of New York’s estate tax are that there is no spousal portability, and the exemption amount is a “cliff,” meaning that if the estate is more than 5 percent of the exemption amount, the entire estate is taxed, not just the amount above the exemption amount.