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What Happens If You Do Nothing? The Financial and Legal Risks of Neglecting Your Estate Plan

Asset Protection

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For many New Hyde Park residents, estate planning seems like a task for tomorrow. Life is busy, and facing the future can feel daunting. But what is the danger in simply putting it off? What happens if you do nothing to formally organize your assets, your medical wishes, and your family’s future?

Neglecting your estate plan means giving up control. You invite a host of complex financial and legal risks that directly affect the ones you love most. In New York, the consequences of dying without a valid will are far more complicated and costly than many people realize.

The State Takes Over: New York Intestacy Laws

When a New Yorker passes away without a will, they die intestate. New York law then determines who inherits their property. This process follows a strict, non-negotiable formula under the Estates, Powers and Trusts Law (EPTL) § 4-1.1.

This formula disregards your personal relationships or who you might have intended to provide for. It follows a rigid hierarchy:

  • If you have a spouse and children: Your spouse inherits the first $50,000 and half of the remaining balance. Your children split the other half equally.
  • If you have children but no spouse: Your children inherit everything in equal shares.
  • If you have a spouse but no children: Your spouse inherits the entire estate.
  • If you have no spouse or children: Assets pass to your parents, then to your siblings, following a defined legal order.

Administration: The Expensive and Lengthy Court Process

The absence of a will forces your loved ones into a formal court proceeding known as Administration. This takes place in the Surrogate’s Court of the county where you lived. For those in New Hyde Park, this means proceedings in the Nassau County Surrogate’s Court. This process is typically more time-consuming and expensive than the probate process for an estate with a valid will.

The Costs of Delay

Without a will naming an Executor, the court must appoint an Administrator. The closest living relative with a priority right under SCPA § 1001 must petition the court. This often leads to delays and potential family friction over who should serve.

Administration involves court fees based on the value of the estate. For an estate valued at $500,000 or more, the filing fee alone is $1,250 (SCPA § 2402). These costs, combined with attorney fees and administrative expenses, can dramatically reduce the inheritance that reaches your family.

Losing Control Over Guardianship

For parents with minor children, neglecting an estate plan is a serious risk. If both parents pass away without a will, the Surrogate’s Court decides who will become the children’s legal guardian.

You may have a clear preference for a trusted family member. But the court may select a relative whose values or location do not align with your wishes. Only a will allows you to nominate the guardian who will raise your children. Leaving this life-changing decision to the court system introduces uncertainty for your children during an already difficult time.

Financial Risks of Incapacity: The Living Estate Plan

Estate planning is not just about what happens after you die. It is equally important to manage your affairs if you become unable to manage them yourself due to illness or injury. Failing to plan for incapacity carries two major risks:

1. Financial Chaos

Without a New York Statutory Power of Attorney, your family cannot legally access your bank accounts or pay your bills on your behalf. They must instead petition the New York Supreme Court to appoint a guardian (Mental Hygiene Law Article 81). This is a lengthy and costly proceeding. You lose control, and your family faces legal hurdles just to handle routine financial tasks.

2. Medical Decisions Made by Defaults

If you become medically incapacitated and do not have a Health Care Proxy, the Family Health Care Decisions Act (FHCDA) applies. This law provides a set priority list for decision-makers:

  1. A court-appointed guardian
  2. A spouse or domestic partner
  3. An adult child
  4. A parent
  5. An adult sibling

This list may not reflect your desired agent. Conflict can arise when family members at the same priority level disagree on critical care decisions.

Take Control, Protect Your Legacy

The question, “What happens if you do nothing?” has a clear answer in New York: chaos, unnecessary expense, and loss of control. You surrender your voice and your assets to rigid state statutes.

At Davidov Law Group, we have been helping the community since 2001. We provide legal and financial planning expertise under one roof. Our attorneys and financial planners focus on clear, actionable strategies. Take the step today to protect your assets and the people you love. Call us at 516-253-1366.

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Families in New Hyde Park often understand that an estate plan helps ensure their wishes are followed after they pass away. It serves as a necessary tool for anyone with children, property, or specific goals for their legacy.

A legal plan functions more effectively when the assets behind it are managed with the same level of care. At Davidov Law Group, we offer a dual perspective. We are estate planning attorneys who also run a separate financial advisory practice. This allows us to help you organize what you own today while preparing for a seamless transfer tomorrow.

The Difference Between Financial Planning and Asset Protection

Financial planning and asset protection are not the same thing. These tasks require different professional tools and separate licenses.

  • Financial Planning: Attorneys cannot provide financial planning services unless they hold a specific, separate license. Through our advisory practice, we focus on managing your current wealth and optimizing investments. The goal is to grow your estate and reduce unnecessary fees.

  • Asset Protection: This is a legal function. It is the responsibility of an estate planning attorney who focuses on asset protection. We can create legal structures to shield your wealth from creditors or lawsuits.

Integrating these two disciplines helps ensure that your financial growth stays safe from legal risks.

How Estate Planning Attorneys Shield Your Wealth

Sound legal planning builds a defense around your estate. We achieve this through legal instruments that must be drafted by an attorney to be valid.

  1. Irrevocable Trusts: These tools can protect assets from creditors and may reduce estate tax exposure.

  2. Revocable Living Trusts: These offer flexibility during your life. You keep control over your assets while ensuring they stay out of the probate court process.

  3. Special Needs Trusts: These help parents or guardians provide for a loved one with a disability without losing government benefits.

  4. Charitable Trusts: These allow you to support causes you care about while providing tax advantages for your estate.

The Risks of a Disjointed Plan

Your legacy can suffer if your financial advisor and your estate attorney do not communicate. Without a plan that covers both legal and financial needs, your family might face several hurdles.

If you pass away without a plan, New York law determines who distributes your estate. This often leads to the probate process in the Nassau County Surrogate’s Court. This process is public and often creates stress for grieving family members. Without a legal document naming a guardian, a judge decides who will raise your children.

A lack of coordination can also lead to tax problems. Financial growth is a positive goal; but without the right legal trusts to hold that growth, estate taxes could take a large portion of what you intended for your heirs.

Professional Help for Your Planning Needs

The intersection of tax law, probate, and investment management is complicated. Working with Davidov Law Group means you do not have to act as the middleman between your lawyer and your financial advisor.

We understand how a specific investment strategy impacts your financial planning goals. We also know which legal asset protection strategies are needed to keep those assets secure.

Call us today at 516-253-1366 to discuss how we can help you organize your money and secure your family’s future.

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What Key Asset Protection Services Can an Elder Law Attorney Provide?

The practice of elder law focuses on the unique legal needs of older individuals. Navigating ever-changing tax laws, rules for Medicaid eligibility, and other essential topics can feel overwhelming for many older Americans. In addition to estate planning, elder law attorneys can provide guidance to clients as they face the many challenges of aging.

Unfortunately, without careful planning and action, it is possible for an older individual’s estate to be rapidly consumed by medical costs, high taxes, and other unanticipated expenses. However, with the assistance of a knowledgeable New York asset protection attorney, you can implement strategies to protect your well-being during your lifetime and retain more of your wealth for the individuals and causes that are dear to you.

Estate Planning

While it may be uncomfortable to think about your mortality, particularly if you are still healthy and active, creating a robust estate plan is vital to ensure the continued financial stability of those you care about most. Elder law attorneys can help draft important legal documents that can allow your heirs to avoid unexpected costs and substantial taxes after your passing that could lead to a potential loss of estate funds, including:

  • Will: If you die without a valid will in New York, your assets will be subject to the state’s intestacy laws. These laws dictate how your estate is distributed to your heirs. However, the succession rules can be complicated, and the court proceeding may be long and expensive for your family. Ultimately, your assets may be passed down in ways you might not have chosen, and taxes may substantially reduce your estate. By creating a will and keeping it up to date, you can ensure your wishes will be followed, and your family will have much less hassle and stress from legal issues after your passing.
  • Financial power of attorney: It’s vital to make plans to protect your wealth during your lifetime as well. A durable financial power of attorney (POA) allows a trusted person to manage your property and assets on your behalf if you become incapacitated and can no longer make or communicate decisions on your own. Having a POA in place creates a smooth transition in the event of an emergency, such as a stroke or the onset of dementia. Although choosing an agent you trust for this role is key, your attorney can also build safeguards into the POA to help prevent misuse of power and protect your estate.
  • Trusts: Trusts, particularly irrevocable trusts, can keep your assets safe while ensuring Medicaid eligibility. When you place assets into an irrevocable trust, they are no longer considered part of your estate. This unique aspect of a trust can be used to reduce your tax burden and help you meet asset limits for Medicaid. However, seeking the counsel of a skilled trusts attorney is essential to ensure your documents are prepared correctly and meet strict legal standards.

Medicaid Planning

The costs of nursing homes and other long-term care facilities have continued to rise dramatically in recent years. A lifetime of savings can disappear quickly if an individual requires this type of care. Medicaid is a means-tested government program that helps pay for these costs and other medical expenses. Elder law attorneys can guide seniors through the complex Medicaid application process, even if they have assets or income above the prescribed limits.

Due to look-back periods and spend-down rules imposed by Medicaid, it is best to begin planning for Medicaid long before you require it to prevent unnecessary depletion of your hard-earned savings. By starting the Medicaid planning process with a knowledgeable lawyer early, you can ensure that much of the high cost of care is paid for through the Medicaid program and not by your personal assets.

Guardianship and Advance Directives

Your legal needs change as you age, and an elder law attorney can help you prepare for whatever comes next. Planning for worst-case scenarios and preparing for potential incapacity is an important aspect of elder law. Executing advance directives, such as a health care proxy and living will, indicate the types of medical care you want in certain situations;, you can give yourself and your family peace of mind that these difficult moments will be handled in accordance with your wishes. With a durable power of attorney, health care directives help avoid a guardianship proceeding which can be an expensive and contentious court process.

Elder law attorneys can help navigate complex family dynamics, ensuring that your wishes are followed, and your assets are protected. Your lawyer can assist you in preventing painful and costly legal battles between family members over your care and control of your affairs in your later years. Enumerating your choices in a legal document may forestall economic or health ruin if you become incapable of making informed decisions.

How Can Our Law Firm Assist You?

Elder law is a complex topic with constantly changing regulations. Elder law attorneys stay current on these changes, from new tax laws to Medicaid eligibility requirements, ensuring their clients’ asset protection strategies are compliant and effective. In addition to our legal knowledge, our elder law attorneys at Davidov Law Group have a solid commitment to building lasting relationships with our clients and their families. A periodic review of your plans and documents with your lawyer or financial advisor is crucial to keeping them aligned with your goals and life situation.

Clients often have concerns about their legacy and how their loved ones will be cared for after they are gone. No matter your financial situation, we can help you build a plan that addresses your worries and protects your health and assets during your golden years and beyond. Contact our office today at 516-253-1366 to schedule your free in-depth consultation..

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You have built up a lifetime’s worth of assets, savings, and wealth, and are finally ready to retire. With smart financial decision-making and years of constant saving, you have even accumulated a healthy amount of money to leave as an inheritance to your children and grandchildren. But did you know that it can all disappear in a heartbeat if you should be sued?

Whether it be the result of financial predators who use the legal system to deprive you of your assets, a legal issue involving your business, or a sudden accident for which you are held liable, a lawsuit can be devastating for your financial situation. In fact, if someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off. This is why asset protection techniques are so important.

What Is Asset Protection?

Simply put, asset protection is an area of law which utilizes various legal methods to shield your assets from being seized by creditors in the event that you should be sued. With a proper asset protection plan, creditors will be largely unable to force you to liquidate your assets or place a lien on an asset when they win a judgement against you.

Common asset protection techniques include:

  • Maximizing contributions to IRAs
  • Moving funds to an irrevocable trust
  • Retitling assets
  • Using limited liability companies
  • Using family limited partnerships

Asset protection can be beneficial for individuals of all tax brackets, not just the super-wealthy. With that being said, an asset protection plan only works if you act prior to being sued. If you are already facing legal action or fear impeding legal action, the courts will likely reverse any transfers of assets you have recently made which prevent creditors from reaching them. For this reason, it is important you retain the services of a skilled attorney and put a plan in place ahead of time before it is too late.

Protect Your Future with Davidov Law Group

Whether you work in a high-risk industry with a high likelihood of being sued or simply wish to make certain your assets remain intact for your heirs, our Nassau County asset protection lawyers at Davidov Law Group can help. Having provided premier-quality estate planning advocacy for clients throughout New York for more than 25 years, our team of top-rated advocates can bring the sound legal counsel and strategies you need to guard your and your family’s interests.

Call (516)-928-6594 or get in touch with us online today to discuss your situation.

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The heartbreak and financial crisis of divorce strikes 50% of all first marriages and 60% of all second marriages. It’s normal to be concerned about protecting your children’s inheritances from divorcing spouses. As a bonus, you can protect their inheritances from creditors and predators, as well as divorcing spouses.

The key to protecting your children’s inheritance is to pass the inheritance in a lifetime individual trust share. The trust is available for your child’s health, education, and maintenance but can’t be taken by divorcing spouse, creditors, and predators.

If you pass an inheritance outright and the assets go into your child’s individual name, he or she is likely to commingle them with the spouse so the inheritance becomes marital property; and, even if kept separate, they can be considered by the judge in property distribution during divorce.

In addition, creditors such as in a bankruptcy, malpractice claim, business failure, medical crisis, or car accident lawsuit have the opportunity to seize your child’s assets when the inheritance is in the child’s name.

Predators are unscrupulous friends, relatives, financial advisors, charities, conmen, and clergy who pounce on heirs. Your child can blow off the predator by explaining that his or her assets are all tied up in trust.

For the maximum asset protection, name an independent trustee of the trust or name your child beneficiary as a co-trustee with a professional trustee such as a CPA, trust company, or estate planning attorney. If the child serves as his or her own trustee alone, the judge may force assets out of the trust. It’s not worth the risk.

The best way to give and the best way to receive an inheritance is in a lifetime, asset-protected, individual trust share. To set this up for your children and avoid their inheritances being taken by divorcing spouses or predators, consult with a qualified estates planning attorney.