FOR BREAKING NEWS VISIT www.qns.com AUGUST 11, 2016 • TIMES 5 Law Offices Of Irina Yadgarova, PLLC Phone: 347-699-5529 Main Office: 63-50 Wetherole Street Rego Park, NY 11374 www.YadgarovaLaw.com ESTATE PLANNING BASICS As estate planning attorneys, we are often birth of a child, the acquisition of property, asked: “what is estate planning?” Estate or a death in the family may necessitate an planning is a process that allows you to update to your Will. control the disposition of your property Probate after your death and helps to eliminate Probate is a necessary court process that uncertainty and chaos that invariably establishes the validity of a Will once the happen upon death or incapacity. Proper person who made the will has passed away. estate planning will help preserve the This process typically lasts about 1 year, assets that you have worked hard to during which time the assets of the estate accumulate during your lifetime. It may may not be distributed to the beneficiaries. also minimize or eliminate taxes on The cost of probate is, on average, 6%- your assets (which your heirs or family 10% of the value of the estate. When a may have to pay) after your passing. To person passes away without a valid Will, understand estate planning, you need to the process of distributing his assets to have knowledge of the following basics family is called “administration.” It is also explored in this article: Intestacy, Wills, a court process, but it typically costs more Probate, & Trusts. and lasts longer than probate. Sometimes, Intestacy there is even a way to avoid probate. If a person dies without a valid Will, he or Avoidance of probate is just one of the she is said to have died “intestate.” In that several advantages to forming a trust. event, New York laws (not you) dictates Trusts how your assets should be divided among A trust is a legal entity, created by you your distributees. Often, these laws divide through a trust agreement, that holds the decedent’s assets very differently from whatever assets to put into it for the the way the decedent would have wanted benefit of a named beneficiary and at his assets to be divided. For example, if some specified time transfers those you leave behind a spouse and two small assets to that beneficiary. A trust is like children, but no valid Will, New York a treasure chest where you place an law says that $50,000 and one-half of asset and give the key to a trusted person your assets pass to your spouse, and the (called a “trustee”) to hold for some rest to your children in equal shares. If period of time. Although there are many your children are young, neither they nor different kinds of trusts, they will all fall your spouse will be able to freely use the into one of 2 categories: 1) revocable children’s share of the inheritance until and 2) irrevocable. A revocable trust can the children turn 21. If you wanted to be easily changed during your lifetime, avoid this situation, or to provide for a whereas an irrevocable trust – with some grandchild, a sibling, or a friend, your exceptions – cannot be changed. This is wishes would be disregarded—unless you because with the revocable trust you hold had a valid Will. on to the key of your treasure chest, and Wills with the irrevocable trust, you give the key Executing a valid Will is an important to someone else to hold. Keep in mind, step in taking control over what happens the revocable trust becomes irrevocable to your property after your death. A Will upon your death. allows you to direct who gets your assets, Each of these types of trusts can serve a to provide for the payment of debts and unique purpose. For example, probate funeral expenses, and even to set up trusts may be avoided with either type of trust, for your family members (discussed but for other purposes – such as protection below). Many people think that writing from creditors, minimization or avoidance down their wishes on a piece of paper and of estate taxes, or qualification for having the paper notarized constitutes Medicaid, only irrevocable trusts may be a valid Will. In New York State, that is used. If you have significant life insurance, not so. A valid Will must be drafted a special type of an irrevocable trust will correctly and executed in compliance with help your family avoid estate taxes on the a number of strict rules. A notarized paper proceeds of that life insurance policy. If that is not prepared by a qualified attorney you want to ensure that you qualify for will most likely not be recognized by New Medicaid or that potential creditors do York courts as a valid Will. Some of your not take your assets, an irrevocable trust is assets, however, such as life insurance, in order. If you only want to make sure pension plans, or joint accounts, are not that your family gets to use the assets distributed through a Will. If you want to right away if something happens to you, ensure that your assets get to the correct then a revocable trust is what you might beneficiaries upon your demise, you may need. Each trust agreement is a complex want to consult an estate planning attorney. legal document that should be drafted by A final word about Wills: even when a qualified attorney who focuses on estate properly drafted and executed, they must planning to avoid any unintended results be reviewed periodically! Our lives are or unfavorable consequences. full of significant events and changes, and Call our office for help in forming your instructions in a Will written 3 years ago unique estate plan! may no longer apply to our new situations. 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