Amy K. B. Ertel, Esq., CFTA
Senior Vice President, Senior Trust Officer - Team Leader
[email protected]941.366.7222 x41960
An estate plan can address what happens to your money, home,
and family after you die. There are many tools you can use to
achieve your estate planning goals, but a Will is probably the most
vital. Even if you're young or your estate is modest, you should
have a legally valid and up-to-date Will. This is especially important
if you have minor children because, in many states, your Will is
the legal way you can name a guardian for them.
Probably the greatest advantage of a Will
is that it allows you choose who will get your property, rather
than leaving it up to state law called “intestacy.” State intestate
succession laws provide a pattern of property distribution if you
die without a Will. Generally, intestacy distributes your property
to your closest blood relatives in proportions dictated by law.
However, the state's distribution may not be what you would have
wanted. Intestacy also has other disadvantages, which include the
possibility that your estate will owe more taxes than if you had
you created a valid Will.
A Will allows
you to leave bequests, another name for gifts, to anyone you
want. You can leave your property to a surviving spouse, children,
relatives, friends, trusts, or charities. There are some limits,
however, on how you can distribute property using a Will. For
instance, your spouse may have certain rights with respect to
your property, regardless of the provisions of your will. In New
York, the spouse’s rights are called their “elective share.”
Gifts through your Will take the form of specific bequests (e.g.,
an heirloom, jewelry, furniture, or dollar amount of cash), general
bequests (e.g., a percentage of your property), or a residuary
bequest of what's left after your other gifts.
In many states, a Will is your only means of stating who you want
to act as legal guardian for your minor children if you die. You
can name a personal guardian, who takes personal custody of the
children, and a property guardian, who manages the children's
assets. This can be the same person or different people. The
surrogate court has final approval, but courts will usually approve
your choice of guardian unless there are compelling reasons not to.
A Will allows you to
designate a person or trust company as your executor to act as
your legal representative after your death. An executor carries
out many estate settlement tasks, including locating your will,
collecting your assets, paying legitimate creditor claims, paying
any taxes owed by your estate, and distributing any remaining
assets to your beneficiaries. Like naming a guardian, the probate
court has final approval but will usually approve whomever you
nominate. Under Florida law, the term for an executor is “personal
representative.”
The
way in which estate taxes and other expenses are divided among
your heirs is generally determined by state law unless you direct
otherwise in your Will. To ensure that the specific bequests you
make to your beneficiaries are not reduced by taxes and other
expenses, you can provide in your Will that these costs be paid
from your residuary estate. Or, you can specify which assets
should be used or sold to pay these costs.
You can create trusts in your
Will, known as testamentary trusts, that come into being when
your Will is probated. Your Will sets out the terms of the trust,
such as who the trustee is, who the beneficiaries are, how the
trust is funded, how the distributions should be made, and when
the trust terminates. This can be especially important if you have
a spouse or minor children who are unable to manage assets or
property themselves. Certain types of trusts such as a martial
trusts or charitable trusts can even help with reducing estate taxes.
Your Will gives you the chance
to minimize taxes and other costs. For instance, if your Will that
leaves your entire estate to your U.S. citizen spouse, none of your
property will be taxable when you die (if your spouse survives
you) because it is fully deductible under the unlimited marital
deduction. However, if your estate is distributed according to
intestacy rules, a portion of the property may be subject to estate
taxes if it is distributed to heirs other than your U.S. citizen spouse.
A living trust is a trust that you create
during your lifetime. If you have a living trust, also known as a
revocable trust, your Will can transfer any assets that were not
transferred to the trust while you were alive. This is known as a
pour-over Will because the Will "pours over" assets from your
estate to your living trust.
Overall, a Will is an important document to provide structure
and organization to your estate plan and to ensure your family
and assets are given direction after your passing. Our team is
available to answer any questions you may have, and to discuss
how a Will can be incorporated into your financial and estate
planning process.
©2023 Broadridge Investor Communication Solutions, Inc. All rights reserved. This material provided by Amy K. B. Ertel.
This material is provided for general information purposes only. Past performance is not indicative of future investment results. Any investment involves potential risk, including potential loss of capital. Before making any investment decision, please consult your legal, tax and financial advisors. Non-deposit investment products are not bank deposits and are not insured or guaranteed by Canandaigua National Bank & Trust or its affiliates, or any federal or state government or agency and are subject to investment risks, including possible loss of principal amount invested.