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Estate Liquidity: What You Need to Know

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Learn more about estate liquidity in New York and what you need to know in this presentation.

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Estate Liquidity: What You Need to Know

  1. 1. , C 1 ESTATE LIQUIDITY W What You Need to Know
  2. 2. WHAT IS LIQUIDITY?
  3. 3. Liquidity refers to the cash value of K your assets 1 A “liquid asset” is one that is already in the form of cash or that can easily | : be converted to cash 1 The value of a liquid asset often surpasses its actual value because the value is readily available L
  4. 4. WHAT HAPPENS WITH INSUFFICIENT LIQUIDITY?
  5. 5. If you die or become incapacitated your loved ones may need immediate access to funds
  6. 6. Without pre-planning, your estate assets will be tied up in probate and unavailable for loved ones
  7. 7. lf you become incapacitated your loved ones may need a court order to access assets
  8. 8. HOW TO CREATE LIQUIDITY
  9. 9. . A Life Insurance Life insurance proceeds are not required to go through probate as they are not owned by you at the time of death
  10. 10. . A Life Insurance Therefore, proceeds of a life insurance policy can provide a beneficiary with cash assets very shortly after your DEATH
  11. 11. ‘T Q , M . ,_ , _,_l, -‘.7 ( i ‘L +—-W W/ ‘vi l'%“, l val l l la“ Choosing the right type of joint ownership can help create liquidity
  12. 12. U Co-Ownership Joint tenants with rights of survivorship creates a situation where your interest in the property will automatically transfer to the co-owner when you die
  13. 13. Financial accounts and securities can be designated as “payable on death” or “transfer on death” account
  14. 14. Some states also allow things like vehicles to carry the POD/ T OD designation which allows you to designate a beneficiary who will automatically become the owner of the account or asset when you die
  15. 15. Trusts provide liquidity in the event of incapacity as well as death — something other options cannot do
  16. 16. Atrust does this by allowing you to appoint yourself as the trustee and a spouse/ partner/ adult child/ parent as the SUCCESSOR TRUSTEE
  17. 17. Assets are then transferred into the trust so that the trust now owns and manages those assets
  18. 18. In the event of your death or incapacity the successor trustee will take over, providing the trustee with immediate access to the value of those assets assuming the terms give the trustee broad discretion
  19. 19. CHOOSING THE RIGHT TRUSTEE
  20. 20. An important factor in the success or failure of a trust is the trustee
  21. 21. Though many people consider naming a spouse/ parent/ child as trustee, this can be a mistake for several reasons, including:
  22. 22. Though many people consider naming a spouse/ parent/ child as trustee, this can be a mistake for several reasons, including: _ - If your family member lacks the Skill and skills or experience for the experience position it may be better to appoint a professional trustee
  23. 23. Though many people consider naming a spouse/ parent/ child as trustee, this can be a mistake for several reasons, including: - If the beneficiaries of the trust are family members as well it Conflict often creates conflict within the family to appoint a family member as the trustee
  24. 24. Though many people consider naming a spouse/ parent/ child as trustee, this can be a mistake for several reasons, including: - The job of trustee can be a time consuming job, depending on the size and complexity of the trust Availability
  25. 25. If your potential trustee has a full-time job or is a full-time parent you could be asking too much by appointing him or HER AS YOUR TRUSTEE
  26. 26. A professional trustee, on the other hand, performs as a trustee for a living every day
  27. 27. .’ il i . cl . . l' “ - v, /, , M. I , - . _. ‘ . .» , . ( iv l", , v ‘ . . . . >. 3} vv 9 . X: I 1 1 t A LEARN MORE ABOUT ESTATE LIQUIDITY IN NEW YORK
  28. 28. Click to visit wwW. kobr1ck1aW. com Law Oflices of Saul Kobrick, P. C.

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