Estate planning must conform to the law. Not only does this mean that wills and trusts need to be drafted in a way that renders them legally valid, but they must adhere to certain restrictions and penalties that may be imposed by the law. By possessing a firm grasp on the applicable laws, an individual who is progressing through the estate planning process may be able to take advantage of options available to him or her that could lead to cost saving.
For example, the Department of Treasury recently announced that it would roll back more than 200 regulations, some of which are directly applicable to estate planning. One of them deals with valuation discounts. Valuation of an asset or a business can be critical in estate planning, as, depending on the determined value, an estate may wind up facing significant taxes.
Many experts agree that the restrictions that were in place were vague and led to inflated estate values. The problem with the restrictions was that they failed to take into account marketability and lack of control, which are two discounts that can significantly reduce an estate’s assessed value.
So what does this mean for New Yorkers who are creating or changing an estate plan? Quite simply, it means that they need to be familiar with the law and how it applies to their situation. Although some legal documents can be drafted without the assistance of an attorney, only a lawyer who is knowledgeable about the applicable law will be able to draft those same documents in a way that saves on costs, protects an individual’s wishes and ensures that wealth transfers occur according to the plan that has been laid out.
Therefore, those who want to learn more about the current state of the law and how it may affect their estate planning may want to speak with a skilled legal professional. After all, there is often too much at stake to make these important decisions without all available information.