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After agreeing to be an executor of your loved one’s estate, you likely saw it as a final act of love. However, this role comes with fiduciary responsibilities you must meet. Under the eyes of New York law, you must act with care and diligence that a prudent person would exercise in managing their own affairs. Committing a mistake could make you liable for losses. Understanding the breach of fiduciary duty Fiduciary duty refers to the strict legal obligation to manage a decedent’s estate with loyalty, care and good faith. Failing to uphold this can cause the beneficiaries, heirs or creditors of the estate to sue you for a breach of fiduciary duty. Common pitfalls can include: Stealing or mismanaging the estate funds Refusing to communicate or update interested parties Delaying the estate administration unreasonably Selling estate assets under market value Favoring one interested party more than the other Committing any of these mistakes can make an interested party prove that you are unfit for the role, removing you from your position as executor. Protecting yourself from errors Despite the difficulties involved, you still want to honor the wishes of your loved one. Start by being proactive. Here are a few tips you can consider to move forward: Research laws related to estate administration. Document all actions you take during the probate process . Work with professional appraisers to accurately value complex assets. Never mix estate funds with your own. Taking the role of executor can be a heavy burden to carry, but you do not have to face this alone. Seeking legal guidance from an attorney can be a valuable resource. They can offer helpful insights on maintaining your fiduciary duty.

In New York, there are many people who have substantial assets that they want to pass along to loved ones after they are gone. This is why it is so important to move forward with comprehensive estate planning strategies. However, there are common missteps people might make because they are not fully aware of the law and the available options. Estate taxes are a primary concern. While the basic exclusion amount where people can avoid paying an estate tax on what they have inherited is currently at $7.35 million, a testator still must be cognizant of pitfalls that could leave loved ones with an unexpected tax bill. This is when they should know about the New York estate tax “cliff” and how to avoid it. Estate tax can be unexpected and costly Under state law, if an estate goes beyond the excluded amount and reaches 105% of its value, then the entire value of the estate can be taxed. Currently, that means that if a person’s estate is worth $7.7 million or more, they will need to pay the estate tax. It can come to a significant amount. There are, however, ways to avoid the estate tax “cliff.” Among the available options are lifetime gifting, a spousal trust, irrevocable trusts, or so-called “Santa Clauses” by having charitable bequests. With lifetime gifting, the taxable estate can be reduced. New York does not have a gift tax. It does have a claw back if the gifts were given within three years of the person’s death. Spousal planning would include a bypass trust. After a spouse dies, their assets up to the relevant estate tax exemption would be put in a trust for the survivor to use as needed. The “Santa Clause” will gift the amount that goes beyond the exemption to charity. The tax would then be eliminated, and could be avoided. Preparing for estate taxes and avoiding them A critical part of estate planning is understanding the nuance and aspects that people frequently forget. That includes taking steps to make sure heirs will maximize what they retain without needing to worry about massive payouts in estate taxes. For help with considering the available options, it is important to have qualified assistance from experienced professionals who provide experienced representation and personal service.

In New York, many people view estate planning as either having a will or a trust. The choice is often based on which is deemed better for their situation. The easiest estate planning document to use is a will. However, people with more complicated circumstances could want to establish a trust. But in some instances, the individual wants a combination of both. A testamentary trust could be useful for people who want to maintain a semblance of control over how assets are distributed. It will also be a protective device over the assets. There are other benefits. But before moving forward with this type of estate plan, it is vital to have help with deciding if it is the wisest option. How does a testamentary trust work? The testamentary trust is part of the will. It will go into effect after the person has died and the will has gone through probate. This is an important distinction because many people choose a trust instead of a will specifically to avoid probate. Still, the testamentary trust gives the testator substantial benefits of both a will and a trust. They can control how the assets will be distributed. If, for example, the heir is under 18 or is not of sufficient maturity to handle the new responsibilities regardless of their age, then the trust can distribute them through a trustee. It can also be used for those who have special needs and even for pets. The testator will select a trustee to oversee the assets. It should be a person who will adhere to the testator’s objectives and understand their goals. A key part of a testamentary trust is that the testator can update it as needed. It is also easier than a creating a trust. Experienced advice can help with creating the ideal estate plan Whether to use a will or trust is up to the individual and how they want to distribute their assets. Myriad factors will be considered as they decide what best suits their needs. A testamentary trust might be beneficial, but it is not necessarily for everyone. For guidance, it is important to have advice from experienced professionals who understand all areas of estate planning .