Protect Your Family,Put Your Worries To Rest

When you are a parent, you worry about everything. Put that worry to rest by letting us help you put together that Will you have been putting off.

Whether your complexity arises from having minor children or a blended family, you need to make sure that everyone is taken care of and your assets go where you want them to go.

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We make estate planning for families simple to put together a will or trust that is tailored to your family and your budget. That way you can stop worrying about the what-ifs and know your family is protected.

Peace of Mind For Parents

Thinking about passing away unexpectedly when you have minor children is heartbreaking. As much as you have been putting off doing a Will - know that you will feel relief when you check it off you list.

Failing to nominate a guardian for minors or properly pass assets to them in trust means that family members - and the Courts - will have to scramble to guess what you would have wanted.

Once you take a little time to answer our simple questionnaire, you can be done in a few weeks— this way you can put these concerns out of your mind knowing all contingencies are covered.

Do you have 5 minutes to name a Guardian for your child?

I am offering a Nomination of Guardian form for free. It will be emailed to you instantly. It is the first step and you can take it now. Each parent must sign their own form.

This Standby Guardian form allows you to name a guardian for your minor child if you (and their other parent) pass away or become incapacitated before they are 18. The Guardian will take custody of your child and the form is valid in NYS for 60 days until the guardian can be appointed by the courts.

You can read more about it here.

Complex & Blended Families

Whether your family complexity arises from having children from a prior relationship, an unmarried partnership or have estranged family members - the default intestacy statute could be disastrous.

Working with us to put together a simple estate plan now avoids serious problems later.

Passing away without a Will when you have minor or adult children poses serious problems that should prompt you to stop putting off your estate plan any longer.

Did you know that without a Will your assets are split between your spouse and children? Definitely not ideal when you have minors or children from a previous relationship.

A simple will or revocable trust avoids all these issues.

Let’s talk how to best protect your family with a tailored estate plan that best fits your needs and budget.

Our consultations are always thorough and always free.
Book online, schedule through email
or call our office at (212) 739-1736.

We Help Families With

Advance Directives

Healthcare Proxy, Living Will, and Durable Power of Attorney. Advance Directives allow someone to name an agent to speak for them when they cannot do so for themselves.

Wills

A legal document that dictates how and to whom assets pass upon your death. A Will must be executed in a manner consistent with your state’s laws to be valid. Avoids intestate succession.

Trusts

A trust is a legal entity that holds assets for a beneficiary. It is funded by simply retitling assets in the name of the trust. Trusts are used for various purposes, e.g. avoiding probate or minimizing taxes.

Special Needs

Special needs planning helps families provide care and support for a loved one with mental or physical disabilities. Supplemental Needs Trusts are often used to hold assets while protecting government benefits.

Don’t You, Forget About Me: No You Cannot Disinherit a Spouse

How to Name a Guardian for your Child

Wills and Trusts: Why the Revocable Trust Wins

Our Estate Planning Guide for Parents

Why every parent with a minor child needs a Will or Trust

Download Here

Estate Planning for Parents

Frequently Asked Questions

What is a nomination of guardian?

A nomination of guardian allows parents to name a guardian for their minor children in case both parents pass away. In New York, this can be done in a Will or using the Standby Guardian form. The form is signed in front of 2 independent witnesses (designated guardian cannot be a witness). The Standby Guardian form is good for 60 days so the guardian has time to petition family court for custody. Download a copy here. The Standby Guardian comes into effect at both parent’s death, mental incapacity, physical debilitation or administrative separation.

Can I appoint a guardian for my child without drafting a Will?

Under Section 1726 of New York’s Surrogate’s Court Procedure parents can appoint a standby guardian in case of incapacity, administrative separation or death. A standby guardian is not the ideal solution because it does not address leaving assets to a child. I draft a version of this form for my clients even when they do name a guardian in their Wills, as it is good for sixty days after the parent’s death without court involvement. Any guardian so named must still petition the court to be legally named guardian.

What type of trust is needed for a minor to inherit?

Should the guardian be the trustee of my child's trust?

Appointing the same person as guardian and trustee for a children’s trust is the simplest choice. As trustee, the guardian has ready access to the funds needed to raise your children. Sometimes it makes better sense to name a separate individual as trustee or co-trustee. An independent trustee may be warranted when parents are divorced, the guardian is not financially stable, the guardian will need funds to purchase big ticket items such as a house, or you simply want another set of eyes on the financials.

Should I use a common pot trust or separate trust for my children’s inheritance?

Whether one single trust or multiple separate trusts makes the most sense for your family depends on how close in age the children are. A single common pot trust mimics the way we raise children - one child may need more care than another. It is also simpler to administer one single trust. Multiple individual trust are best suited for teenagers, grown children, children far apart in age because such an age gap would perhaps unfairly prolong when the older child inherits and could adversely affect retirement benefits.

At what age should a child inherit?

The biggest factors in deciding what age a child should inherit depends on the size of the inheritance and the child’s temperament. When creating trusts for young children, we do not know how they will later handle money. Some studies claim that the brain is fully developed by 24 or 25. If a child is to inherit hundreds of thousands of dollars, it is safe to say they are unlikely to be mature enough at 18 or 21 to manage such a large bequest. One way to leave a sizable inheritance is to stagger the distributions amongst different ages. Another method is to appoint a lifetime trustee and never allow the child unrestricted access to principal. Remember, up until the child has access to principal, the trustee always has discretion to make disbursements to the child.

How does the secure act affect leaving assets to children?

The SECURE Act (Setting Every Community up for Retirement), enacted in January 2020, changed the way retirement accounts are taxed when inherited. Previously an inherited IRA could be stretched over a child’s lifetime and annual withdrawals based on the life expectancy of the beneficiary. This resulted in relatively small taxable income distributions each year. The SECURE Act now restricts this lifetime “stretch” to spouses, minor children, disabled children and beneficiaries not less than 10 years younger than the decedent. Every other beneficiary, including minors upon reaching 21 years of age, must withdraw the entire asset within 10 years.

Minor children who inherit retirement beneficiaries can take the smaller distributions each year until they reach 21. They then have ten years to take out the entire amount - which is taxable as ordinary income.

How are expenses in a trust allotted between children?

If you have multiple children inheriting assets in a common pot trust, there is no requirement that the trustee disburse funds equally between the children. This means that you need to outline what distributions count as advancements from a child’s share of the assets remaining when the trust ends. For example, will the trust pay each child’s college expenses regardless if one child gets a scholarship and another goes to an expensive private college? If so, the expenses are treated as advancements.

Can a child be co-trustee of their trust?

A child can become co-trustee of their trust any time after reaching 18 years of age. Allowing the child to become a co-trustee teaches them about trust administration. They can also become sole trustee of their trust at a stated age. This provides incentive for them to keep their assets in the trust. Any assets in the child’s trust at death is protected from creditors and passes to their heirs estate tax free.

Is a trust created for children protected from creditors?

A beneficiary’s trust is protected from creditors and divorce so long as the trust is drafted to avoid giving the beneficiary absolute discretion to the principal in the trust. Minor’s trusts in a way that the trustee (not the child) has absolute discretion to distribute principal. Once the child reaches a certain age, we usually give them the right to be sole trustee. At that point, the beneficiary should be restricted from having absolute discretion to distribute principal to themselves. Instead, the trust is limited to an ascertainable standard, allowing them to distribute assets to themselves for health, education, maintenance, and support (HEMs language). HEMS is very broad - so the beneficiary-trustee can use money in the trust for almost anything and the trust assets are protected.

This type of trust protects child-beneficiaries from outsiders, but not themselves. The only way to protect beneficiaries from themselves is to always have an independent trustee and not allow the beneficiary to be sole trustee at any age.

Should I give a beneficiary a power of appointment over their own trust?

A power of appointment is a powerful tool in estate planning and should be used only with full cognizance of the consequences. Granting a general power of appointment ensures that the trust assets will be included in the beneficiary’s estate. This is desirable if the asset is expected to appreciate in value as it will get a step up in value to fair market value at death, thereby reducing capital gains. This is undesirable if estate taxes or creditors are an issue, as the assets are includable in the beneficiary’s estate. The other option is to give the beneficiary a limited power of appointment, such as testamentary power of appointment to leave the assets to a spouse or descendants at death. Even if the beneficiary exercises the power of appointment, the assets do not pass through their estate, so no estate taxes or creditor issues.

How is a beneficiary’s trust taxed?

Most trusts are structured so that the beneficiary receives all the income generated from the trust. The beneficiary is taxed as ordinary income to the beneficiary. This is because trusts pay the high federal income tax rate – more than twice as much as a single individual and three times as much as a married couple. Trusts also pay the 3.8% net investment income tax and more in capital gains.

For minor’s trusts, we usually leave the distribution of income and principal to the discretion of the trustee. it is important that the trustee understand the tax implications of distributing or nor distributing income generated by the trust to beneficiaries.

What is the kiddie tax?

Kiddie tax is a tax on the unearned income of children, enacted to avoid income shifting by wealthy parents. If a child is orphaned the kiddie tax is inapplicable. The kiddie tax applies if either parent is still living, the child is under age 18 or a full-time student not yet 24 years of age, and their trust earned income more than $2,200. If the child's income derives only from interest and dividends and totals less than $11,000, the parent can elect to include it on their own return. Otherwise, the child has to file a return and the income tax is based on the parent’s income tax bracket.

Estate Planning for Families

Let’s work together in drafting an estate plan that protects everyone in your family. You may think that this is overwhelming but we provide simple solutions to hard problems. Most of the work can be done remotely via email, Zoom, and our secure client portal.

I offer affordable flat fee pricing to make sure we get every detail right and that you understand the process from start to finish. Ask about my sliding scale fees for single parents.

Book a Free Appointment Online

Office:
221 Columbia Street, Brooklyn,
New York, 11231

Ph. (212) 739-1736 Fax (212) 202-5263
jwilson@jessicawilsonlaw.com

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