Estate planning helps individuals express their end-of-life wishes, from medical care to who should receive assets like money and property. Hiring an estate planning lawyer ensures you’ll develop the plan that’s right for your family. This process has numerous benefits that provide your loved ones with the resources they’ll need to protect your rights and property.
Why Estate Planning Is Important
1. Addresses End-of-Life Decisions
There are two important documents that come along with estate planning—power of attorney and medical power of attorney. A power of attorney covers your finances if you are unable to take care of them by putting someone else in charge of monetary decisions while you are recovering. A medical power of attorney covers your health-related decisions if you are unable to make them. Both documents put a person you trust in charge instead of having a court appoint someone who is not familiar with you or your wishes.
2. Protects Your Family When You Are Gone
After a lifetime of building assets, you want to be sure it goes to the right people. Estate planning allows you to stipulate how assets are distributed as well as how they are used. For example, if you do not want a lump sum of money to be distributed to your child upon your passing, you can plan to have it allocated to an education or retirement fund.
3. Reduces Estate Taxes
Planning early can save you a lot of money later. If you pass away, your estate will be taxed by the government before being distributed to your heirs. In New York, assets valued over $5.25 million are subject to a 3.06% tax rate; this increases to 16% for assets worth more than $10.1 million. However, an experienced estate planning lawyer can help you reduce the potential tax burden by replacing your assets with a life insurance policy. For example, if you can accurately estimate what your estate tax payment would be, you could purchase a life insurance policy for that amount and then place it in an irrevocable trust, which technically keeps the policy out of your estate and away from taxes. When you pass on, the life insurance policy can then be used by your heirs to pay off the estimated estate taxes.
If you are an Orange County, New York, resident concerned about your family’s financial future, contact an estate planning lawyer. They will examine your assets and create the best possible plan to put your family in a solid financial position in the event you pass away. John E. Bach, Attorney at Law, has over 30 years of estate planning experience and provides the individual attention you deserve. Call (845) 294-7941 today or visit the firm’s website to learn more about their services.