Creating or reviewing an estate plan is something that many New York City residents know they should do but often put off. It’s natural to say things like: “I’ll take care of it later,” or “I don’t have enough money to have an estate plan.” But life and circumstances happen that may be out of your control. Every adult needs to have an estate plan, regardless of how large or small their estate is. The new year is a great time to make a resolution to create or review your estate plan. No one knows what the future holds, yet legally documenting your wishes ensures that you decide what happens to you, your loved ones, and your assets. Start off 2025 right by working with The Village Law Firm to secure your present and future.
How Do You Create an Estate Plan?
Estate planning provides many benefits to individuals and their families. One of these is relieving stress and uncertainty during a difficult time by providing a clear guide for what you want to happen in the event of your incapacity or death.
Estate planning starts with working with an experienced New York City estate lawyer who guides an individual or family on making a last will and testament and key documents including powers of attorney, trusts, and medical directives. Creating an estate plan allows your appointed individuals to protect investments and other assets during disability or illness and ensure the distribution of property after death. At the same time, a carefully crafted plan helps to minimize or avoid taxes and probate.
What is a Last Will and Testament?
A last will is a legal document addressing property, assets and investments and their distribution after the owner’s death. If there is no will, New York State’s laws determine how the estate will be distributed. A will is also used to name a guardian for minor children in the event both parents pass away, so every family with young children should have a will. Without a will naming a guardian, the court will make decisions about the children’s guardian, possibly appointing a person the parents might not have chosen.
Do You Need a Power of Attorney as Part of Your Estate Plan?
When created by an experienced New York City estate planning attorney, a Power of Attorney (POA) is a legally binding estate planning document providing the person (principal or grantor) the ability to appoint someone else to handle financial and healthcare decisions if you’re unable to. A POA can be created for any adult whether you need a durable POA to cover long-term incapacity or a limited POA for short-term situations. Without a POA, loved ones may face costly court proceedings to manage your affairs during emergencies.
What If You Already Have an Estate Plan?
Your estate plan is not a static legal document. As your life changes, so also might your wishes regarding how your assets are distributed after your death. It’s common for relationships, financial circumstances and family dynamics to change over time. Each significant shift in your life may warrant a review and possible update of your estate plan. Consider the list below for reasons why you would want to create or update your estate documents.
Have Family Dynamics Changed?
One of the most common reasons to update your will occurs when your family dynamics change. Have you recently married, divorced, or welcomed a child or grandchild? These life events may change how you want your estate distributed. It’s important to review your will to ensure that new family members are included or that former spouses are removed, reflecting your current wishes. If you’re recently divorced, read our article, Steps for Updating Your Estate Plan After Divorce, or watch one of our videos about protecting you and your loved ones after divorce: Recently Divorced? Here’s Why You Need to Update Your Estate Plan and Estate Planning for Divorced Parents.
Do You Know Who Will Care for Your Children If Something Should Happen to You?
Your guardians will be entrusted with the care of your children, and therefore, you should be sure that the guardian(s) you have named to care for your children are still the people you would want in that position. Ensuring your children are cared for in your absence requires regular review of your guardian selection. This choice might change if the person you chose moved far away, and you’d want your kids to stay in the same community. You also might have a change of heart if your potential guardian now has their own kids, and you’re not a fan of their parenting style. Who raises your children is the most important role in your estate plan, so you want to make sure that it’s the right person. Read more in our article: Standby Guardianship is a Great Tool to Protect Your Children
Do You Know Who Will Manage Your Estate?
Every estate plan incorporates other people in your life to carry out your wishes. Your executor or trustee must liquidate accounts, ensure your assets go to the proper beneficiaries, pay any debts not discharged (i.e., taxes owed), and sell your home. These positions of trust should be reviewed regularly to make sure your choices haven’t changed.
Is the person you named as your executor still the person you wish to oversee your estate? The same applies to the individual(s) you have named as trustee or successor trustee. If your relationship with these individuals has changed, or even if they have passed away, you will need to name new people, or even a corporate trustee, who can manage your trust according to your desires.
Did You Recently Move to New York City?
Laws governing wills and estates vary by state. If you have moved to New York City since you created your estate plan, it is time to review it. The legal requirements of New York state might differ from those in your previous residence, affecting taxes or estate administration. Our estate lawyers at The Village Law Firm focus on estate law in New York and surrounding states, and they can ensure your documents comply with local laws.
Also, if you moved to New York City from another country, our estate planning team can help you navigate the complex rules faced when relatives and assets span more than one country. Tax and estate planning can be a challenging topic for anyone, but the rules are far more complicated – and the stakes often higher – for those with cross-border ties. The Village Law Firm regularly assists global families to protect minor children when close family members live overseas, arrange assets in a way that allows for the easy transition to heirs, and minimize taxes.
Any Changes in Tax Laws?
New York state and federal tax laws are constantly changing and can impact your estate planning significantly. An increase or decrease in estate or inheritance tax, for instance, could affect the value of your estate that your beneficiaries will receive. Reviewing your will with an estate planning attorney can help you understand the latest tax laws and revise your estate plan accordingly, ensuring that your heirs are protected from possible tax burdens.
Has the Value of Your Estate Changed Significantly?
A substantial increase or decrease in the value of your estate is another reason you should review your estate planning documents. If you’ve acquired new assets, started a new business, or experienced a change in the value of your assets, your current documents may no longer reflect your situation accurately. You may wish to redistribute your assets, set up a trust, or implement advanced estate tax planning.
Is Your Beneficiary Information Current?
As time passes, you may need to update beneficiary information. Beneficiaries may have passed away, or your relationship with them may have changed. It’s equally important to review other items, like life insurance policies and retirement accounts, to ensure that all beneficiary designations are up-to-date and consistent with your will. If you have a Revocable Living Trust, you may want your trust to be named as the beneficiary.
Do You Have Peace of Mind?
One of the main reasons to review your will is for your own peace of mind. Knowing that your affairs are in order and your loved ones will be taken care of according to your wishes is priceless. Regularly reviewing your estate plan every few years or after major life changes ensures that everything is up-to-date and reflects your desires. At The Village Law Firm, we understand it takes a village to make sure the whole family is accounted for and cared for. We want to be a part of your village’s plan for the future. Schedule a call with our New York City estate lawyers to review your plan, or to create one, and make your 2025 New Year’s Resolution a reality!
Key Points to Remember:
- Your estate plan governs how your property will be distributed, who will care for your minor children and oversee your property, and the protection of your legal rights in the event of incapacity.
- Life changes, such as marriage, divorce, birth of a child, or moving to a new state, necessitate an estate plan review.
- Legal and tax law alterations can impact your estate planning.
- Changes in the value of your estate due to reasons like asset appreciation, starting a business, or inheritance may require adjustments in your will.
- Regular reviews of your beneficiary designations, power of attorney and overall estate plan ensure that your current wishes are accurately reflected.
- Peace of mind is achieved by knowing your affairs are in order and ensuring that your assets are distributed according to your wishes after your death.
- Working with a New York City law firm like The Village Law Firm that has an annual review program can help ensure that your estate plan is always up to date and that your family and legacy receive the best possible protection.
Reference: ElderLawAnswers (Jan. 2, 2024) “New Year’s Resolution: Get That Estate Plan Done.”
