Don’t Give What You Don’t Have
If you leave beneficiaries specific dollar amounts in your will or trust documents, you may be creating a situation where the estate cannot afford to pay all your cash gifts. You may have a very good accounting of your cash assets right now and you may think you know how much you can leave to each of your beneficiaries.
Unexpected Expenses Cause Problems
The problem is that no one can predict what expenses you might have later in life. There are commonly medical expenses and the estate may have to pay for funeral and burial expenses which were not considered in the accounting of assets to give away. When the estate does not have enough money to provide the assets as designated in a will or trust, the estate is said to be in abatement. A reduction of cash gifts will be determined in cases where abatement has occurred.
Avoiding abatement may be as simple as listing percentages of assets rather than specific dollar amounts in a will or trust document. If a percentage is designated rather than a dollar amount, each beneficiary will receive their respective percentage of the estate following the estate satisfying all debts.
Getting Legal Help
Experienced Estate Planning Attorney Elga Goodman can help you prepare an estate plan which includes thoughtful drafting of wills and trusts to protect your loved ones. Contact us today at 973-841-5111.
Posted in: Estate Planning, New York Estate Planning