Hidden Complexities in Basic Estate Planning

Some estate planning concepts may seem so straight-forward that community members try to go it alone. After all, a will is just a document that clearly spells out one’s wishes and lists who gets what on a piece of paper. Other assets, like retirement funds, just need a beneficiary named. What could be complex about that?

The answer, of course, is many things.

Take the retirement funds. It may not be as simple as just picking someone. A New York estate planning attorney knows that sometimes special steps have to be taken to guarantee that the desired beneficiary actually receives the funds in as hassle-free a manner as possible. For example, there may be problems when one wants to name children as the beneficiary of an employer retirement plan–like a 401(k). The rule in most cases requires a spouse to give their consent when anyone other than the spouse is named beneficiary This is true even if the named beneficiary is someone like a child– a stepchild, adopted child, or even a natural child.

Even when that consent is present (or there is no spouse), it is important to be very specific. Leaving a retirement to one’s “children” may not be enough if those children are stepchildren. It is not unheard of for the court or an administrator to believe that “stepchildren” do not meet the definition of children as mentioned in the retirement beneficiary designation. For that reason it is usually necessary to list the specific names of the children on top of having some clear language on the definition of children not named who may also be included.

Because you will no longer be around to tell them exactly what you meant, it is critical to have your wishes spelled out clearly, eliminating all chance at ambiguity. These sorts of confusing issues are often mixed-up when doing this legal work yourself.

The same general problems comes with creating a basic will. There are specific rules that must be followed for the document to hold water in court–those requirements are laid out in New York statutes. For example, there must be at least two witness signatures, and those signature must be made in the testator’s presence (the person making the will). The address of those individuals need to be included, because they will be called upon to verify the process when the time comes for probate. Those witnesses should also be “disinterested.” A court may not give any sort of gift in a will to a witness unless there are at least two other “disinterested” witnesses.

The bottom line is that you only get one bite at the apple with these situations. If a mistake with even a basic process like beneficiary designation or will is not uncovered, then the entire plan will not work as intended when the time comes For this and many other reasons, there is simply no replacement to visiting a New York estate planning attorney and ensuring that things are done right the first time.

See Our Related Blog Posts:

Not All Children Treated Alike

Clumsy Estate Planning: Transferring A House to a Child

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