Taxes undoubtedly play a determinant role in New York estate planning. Understanding how assets can be transferred and passed on while incurring the lowest tax burden is crucial. Yet, it is a drastic oversimplification to assume that planning involves only looking at taxes. The “human” element is often even more important. Each New York estate planning lawyer at our firm understand that creating the best possible plan for each family requires an understanding of the unique family dynamics at play.
These family issues are not always easy to discuss. No one necessarily enjoys sharing information about potential family conflicts, personality issues, or other challenges which influence these decisions. However, as a new article in Financial Planning recently argued, failing to address these details often means that a plan will not work as needed.
What are these “human” factors beyond the legal, tax, and technical issues? The story summarizes them as “lifestyle choices, drug addictions, religious practices, health concerns, charitable goals, and preference regarding the disposition of collectibles and other personal property.”
How do these issues play into an estate plan?
For example, if a family member has a serious addiction, steps need to be taken to account for the concern. Assets can be bequeathed to these individuals in a trust with specially selected trustees to make appropriate disbursements. In addition, the planner needs to ensure assets are not jointly held with one who a potentially debilitating addiction and make sure that other assets might not go directly to the heir without safeguards.
What if there are serious health or disability concerns?
Some individuals may have mental health issues which present competency concerns. It is absolutely critical that this is considered, not only to ensure the plan accounts for necessary care, but also to ensure the legalities of the agreement are enforceable at all. Common steps for families with these issues at play include creating automatic payment systems, setting up systems to ensure financial exploitation is prevented, consolidating assets, and simplifying the overall financial situation for the individual.
What about a family with multicultural concerns?
Families are diverse, and different member may not share religious, lifestyle, or cultural observances. This may affect how one wishes to leave assets or prepare for other issues in the future. Sometimes this makes it vital to have funeral decisions laid out clearly so that proper customs and guidelines are followed. In addition letters of instruction should be crafted with details about how children should be raised if caregiving must be passed on to another.
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