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Estate Planning FAQS

Estates whose value is below the estate tax exemption amount are nontaxable. For 2021, the federal exemption amount is $11,700,000. So if the net assets of the estate are less than $11.7 million for those dying in 2021, then there would be no federal estate tax. For those state that have an estate tax, there could also be an exemption amount. The current New York estate tax exemption amount is $5,930,000 for 2021. Under current law, these estate exemption numbers will remain until January 1, 2022, at which point it will rise again with inflation. To complete a final accounting, the fiduciary of the estate can either petition the court for a voluntary judicial accounting, or provide an informal non-judicial accounting to the heirs. For a voluntary judicial accounting, the fiduciary may present to the court the estate account and a petition praying that the account be judicially settled and that all necessary and proper parties be required to show cause why such settlement should not be had. This happens in estate that are more complicated and if there are potential disputes. In most cases, the estates are simpler and there are no disputes wherein the fiduciary can provide an informal accounting to the heirs who would then release the estate from any further liability.To prepare for estate planning, you would want to identify all of your assets and how you are holding them, solely or jointly. You would also want to identify who you want to handle your estate upon your death as well as determining who will be beneficiaries of your estate. Additionally, you would want to appoint someone to handle your finances if you become incapacitated, identify who you would want to make health care decisions for you if you are incapacitated and to let that person know your health care wishes. In New York, four fundamental documents you would want are your last will and testament, a power of attorney, a living will and a health care proxy. Also, you may want to consider a revocable trust to help avoid probate or other type of irrevocable trust to lessen any estate taxes that could occur.When appointing a trustee, you can appoint an accountant or other professionals as a trustee. You can also appoint a family member or a trusted friend to be a trustee. For the more complicated trusts or trusts with a high value, then most people will appoint a professional such as an accountant or a bank trust department to be a trustee, or a co-trustee with a trusted friend or family member who knows your family dynamics.To act an an executor of an estate, you will want information on the decedent's family tree, bank accounts and other financial holding including real estate and the probate process. You will want to know how to petition the court to probate the will and to have the court appoint you as the executor. You will need to list heirs of the decedent, provide the death certificate, and have the original copy of the Will to submit to the court.

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