Basics of Estate Planning



When you hear Estate Planning, what are you picturing?


Do you see the word: Trust or Will anywhere? Perhaps you are envisioning an elite family (of British ancestry) figuring out ways to game the system and stay rich? Maybe you are thinking about a "trust-fund" baby who has all of his families money set aside for him to live off for the rest of his life...maybe.


And while these images are a reality for a select few, Estate Planning should be a reality for EVERYONE. In this article, we are going to lay out the basics of Estate Planning and why you should be considering your own Estate Plan sooner than later.


Estate & Property. Section 1-2.6 of New York Estates, Powers & Trusts defines 'Estate' as either: (a) The interest which a person has in property or (b) The aggregate of property which a person owns. They go on to define Property, under Section 1-2.15, as "Property is anything that may be the subject of ownership, and is real or personal property."


So what?


Estate Planning is simply the process or plan created by a person to manage one's assets during one's lifetime and the disposition of those assets upon death.


And really there are two buckets with regard to Estate Plans...You either have a plan in place during your lifetime (and at the time of death) or you don't. By not having a plan at all, your assets, your health, and your family members and loved ones may be greatly impacted. For example, there can be severe tax implications, legal costs, and even critical care decisions made or not made on your behalf if you do not have a proper plan in place.


More Than Assets. But here is the kicker, and why we started the article by asking you to envision "Estate Planning" above. Estate Planning is much more than just protecting assets and transferring them upon a specific event or time...For example, Estate Planning can help (1) prepare you for incapacity, (2) make custody arrangements for minors or handicap children, (3) provide financial support for your loved ones, (4) implement business succession plans, (5) donate property to charitable causes you believe in and much (much) more.


OK, I am Interested. Now What? You need to call Snider Law, PLLC right now...just kidding!


There are many steps you can take if you are interested in coming up with an Estate Plan. Here are a few to consider:


  1. Identify your goals.

  2. List out all your assets.

  3. Identify the loved ones you want to support and protect.

  4. Identify risks to your assets and think about ways to mitigate.

  5. Come up with plans for potential heirs and beneficiaries, hand-holding allowed.

  6. Want to contribute to charity, great, find out how.

  7. Determine your tax liability, if any.

  8. Determine the legal tools required to achieve all the above.


Identify your goals. This is a crucial first step because it allows you to think about the goals for your estate plan. No assets? No problem. Goals like: "who will make decisions on my behalf if I become incapacitated?" or "if put in an unfortunate situation, do I want to be put on a ventilator or feeding tube?" are other decisions that you can plan for with an Estate Plan. And other than personal well-being, you could have a goal to avoid probate court all together or have specific bequests in your will etc. etc.


That is why it is critical to identify your goals early on so you can communicate with your attorney(s) who will act as the "legal vehicle" in helping you achieve those goals.


List out all your assets. It is important to list out ALL your assets because if an asset is not covered under a legal tool (discussed further below), then it may be subject to Probate Court. Working with your spouse, accountant, financial advisor may be helpful as you begin outlining every asset you independently or jointly own that may be subject to your Estate Planning.


Identify the loved ones you want to support and protect. At this point, we now know an Estate Plan is more than just asset protection and transfer. Loved ones you may identify include, but are not limited to: spouses, children, parents, pets, friends, business partners. How can they be protected? In some scenarios, you may have minor or handicap children...who will care for them if you or your spouse or both of you pass away? Since minors cannot inherit money directly, you will need to consider a legal tool like a trust to provide t