Most American adults have not taken the time to create an estate plan. It may be that some consider estate planning to be something for the wealthy or elderly.
However, everyone can benefit from making an estate plan, regardless of age or net worth. Here are five compelling reasons to create one:
Protect your assets
New York has specific laws regarding the distribution of assets if someone dies without a valid will. If a person dies, leaving behind a spouse and no children, the spouse receives everything. Conversely, if there are children and no spouse, the estate is divided among the children. If there is a spouse and children, the spouse will receive the first $50,000 and half of the remaining balance. If there is neither a spouse nor children, the estate will go to the parents or siblings.
By creating an estate plan, you can ensure your assets are distributed according to your preferences and not by the state’s default rules.
Minimize estate taxes
New York is one of the few states that imposes a state-level estate tax. With proper planning, you can minimize the estate tax burden on your beneficiaries, ensuring that more of your assets go to your loved ones.
Provide for minor children
If something catastrophic were to happen to you and your spouse, you don’t want to leave your children’s fate in the hands of the New York court system. An estate plan allows you to name a guardian for your children in the event of your untimely death.
Plan for incapacity
Estate planning is more than just planning for your death; it’s also about planning for incapacity. By creating a power of attorney, you can designate individuals to make financial decisions on your behalf if you cannot. Advanced health directives lay out your wishes regarding end-of-life care.
Avoid probate
Probate can be time-consuming and costly. By creating an estate plan that includes tools like trusts, you can help your loved ones avoid the probate process, ensuring a faster distribution of your assets.
Creating an estate plan is essential for protecting your assets, expressing your final wishes, and providing for your loved ones. You will have peace of mind knowing that your plan aligns with your wishes and not New York’s intestate laws.