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family, or paying that money over to the government, or other unrelated third parties.
Irrevocable Life Insurance Trusts
The Irrevocable Life Insurance Trust (“ILIT”) is a unique instrument that serves several important purposes, two of which we will touch on here. Many people are unaware that the proceeds of life insurance policies are considered part of your estate for estate tax purposes. By using a properly drafted ILIT, however, you will bring the value of any life insurance polices you might hold outside of your estate for estate tax purposes on both the state and federal level. For those of you whose net worth puts them at or near the estate tax threshold, an ILIT is a necessary part of your estate plan.
An ILIT will also permit you to direct the disposition of your life insurance proceeds in a more specific manner than simply designating a beneficiary. Frequently, our clients have their ILIT benefit their spouse during the spouse’s lifetime, and upon the death of the spouse, benefit the children of their marriage. Since an ILIT is a trust, you can give specific directions in your trust instrument as to how the assets should be used, and protect the assets from your heirs’ potential creditors.
Estate Administration
The following documents should be brought to your attorney after the demise of a loved one:
An original or certified copy of a death certificate (look for a raised seal)
1. The original will (if any)
2. A funeral bill marked “Paid”
3. A basic family tree with contact information for close relatives
A list of assets including:
1. Real Estate
2. Bank and Brokerage Accounts 3. Vehicles
4. Retirement Accounts 5. Annuities
6. Insurance Policies
7. Valuable Collections
The above documents and information will assist your attorney in drafting the probate or administration petition for your loved one’s estate. It is important to note that the IRS form 706 - the estate tax return - must be filed within nine months of the death of the decedent (or within the six months extension window if one is timely applied for).
The probate or administration processes are formal judicial proceedings which take place in the decedent’s county’s Surrogate Court. If you are the nominated executor, or a person eligible to serve as administrator, you should consult with your attorney and provide the information and documents listed above. Your attorney will prepare the petition for probate or administration. Filing fees are paid on a sliding scale depending on the size of the estate.
Under New York State law, certain people are entitled to notice of the probate or administration of the estate - namely the beneficiaries, fiduciaries, and “heirs at law” of the decedent. The probate or administration process will be substantially simplified if these individuals consent to the relief requested in the probate or administration petition, and waive the issuance of formal process. This will be the case where there are no objections to the appointment of the name fiduciary or applicant, and there are no objections to the disposition of assets provided for in the will. If the persons entitled to notice do not consent to the relief requested in the petition and waive the issuance of formal process, then the Court will issue a “citation” to appear in Court on a certain day, and each non- consenting person must be formally served in accordance with New York State law.
Presuming the administration or probate petition is accepted, the executor or administrator will receive their letters
Brueggemann Funeral Home of East Northport, Inc. - Page 65