This week we will finish part 2 of the 8 reasons why you need a will. In last week’s article we addressed who inherits your assets, the executor and specific requests. This week our Long Island Lawyers at Schwartz, Fang & Keating, P.C. will address control and use of trusts, asset protection and use of trust as well as saving taxes and flexibility.
In a will, you can determine what parties may receive assets outright, and what parties may be better served receiving assets in trust. Further, if you want to control, which trusts are contained in a will, you can determine if a beneficiary would receive assets over time and in steps, as certain ages are attained, or whether the assets should stay in trust for the beneficiary’s lifetime. In addition, you could set standards to measure when additional amounts of trust could be paid to a beneficiary. For example, you could say for a child’s health (including any period of hospitalization), education (including any level of school, nursery up to graduate school), maintenance and support (in their current manner of living). Moreover, you could provide for additional eligible categories to disburse funds to a beneficiary such as starting a new business, and purchasing a home.
Trusts under a will provide a means of asset protection for beneficiaries. The protection could be from creditors, from a future ex-spouse, from a predator, or to protect the beneficiary from themselves if they are a spendthrift, have financial difficulties, or have other problems that seem to cause money to evaporate quickly after they gain possession of it. If there is a child or loved one in your family with special needs who is receiving government benefits, a Will is the place you can provide under a Supplemental Needs Trust, so that after you pass, the beneficiary can maintain their benefits and the trust assets will used to enhance that person’s life by supplementing and not supplanting that beneficiary’s governmental benefits received.
A will is the place to address provisions for federal and state estate taxes and planning to reduce such taxes. Jurisdictions such as New York have a lower estate tax threshold than the federal government. Therefore, a will with careful planning could help provide a mechanism to leverage that difference, and provide estate tax planning to minimize estate taxes. Further, the value of what you give to charity under your will not only leaves a legacy for you, those amounts could reduce the estate taxes owed.
Wills are flexible documents in that you can change them so long as you are alive. For that reason, as people and loved ones come in and out of our life for various reasons (births, deaths, marriages, divorces, etc.), you can change your will as your life changes. Anyone with capacity to write a will can draft a will. When your capacity to sign is not a concern, and your intentions are clear it is best to act, rather than adding to a stressful time after an emergency.
Sometimes it takes a tragedy like losing a friend or loved one to realize that it may be time to update or make a will. It is better not to put off tomorrow what you can do today, because life is unexpected and things happen. With the proper planning, your wishes will be carried out and your loved ones will be cared for when you pass. Unfortunately, as they say, there are only two certainties in this world: death and taxes. Why not prepare and leave your loved ones with a plan of exactly what you want?