Asset Protection

Are Trusts Useful Without the Estate Tax?

Published on: July 17, 2017 | by Ettinger Law Firm

Many areas of the law are constantly changing based on a variety of factors. Estate planning is no exception, especially given that there are potential changes coming to the United States tax policy under the current administration. One of those potential changes is the elimination or restructuring of the estate tax. For individuals with trusts or considering establishing a trust as part of their comprehensive estate planning strategy, the elimination or restructuring of the estate tax may make people wonder how effective those trusts will be in achieving the goals behind their creation. Even with the potential for such changes, trusts are still an important tool when it comes to comprehensive estate planning that will continue to provide many important benefits like those below.

Avoiding Probate

With or without the estate tax in its current form, trusts can help you avoid the headaches that often come with probate. By creating specific types of trusts to handle various assets and properly assigning such assets to those trusts, you can avoid the need to probate those assets This can save time and money, and can help ensure that your assets are distributed in the way you see fit.

Avoiding Claims of Undue Influence

Published on: July 9, 2017 | by Ettinger Law Firm

Comprehensive estate planning is a responsible way to protect your assets. One of the primary ways you can utilize estate planning to protect your assets is by ensuring that your estate plan accurately reflects how you wish to have your assets distributed in the event of your death. Taking steps toward preventing individuals from contesting your Will is one way to help make sure that your estate will be distributed according to those wishes. A common approach many people take to contesting a Will is by claiming that the testator – or the person that created the Will – made decisions within the Will because of undue influence. While this claim is not always wholly unavoidable, there are steps that you can take to decrease the chances that such a claim will arise.

Understanding Undue Influence

There is nothing wrong with an individual asking for specific property or even a child encouraging a parent to leave specific things to them instead of their siblings. Courts do not typically view these actions as examples of undue influence, even when an individual is fervent about their desires. However, such requests move closer toward undue influence when the testator is in a compromised position such as being mentally or physically ill. For instance, if the child asking for property is the ailing parent’s caregiver, a court may find that repeated requests for certain assets could qualify as undue influence depending on the other circumstances surrounding the request and individuals involved.

Choosing the Right Beneficiaries

Published on: June 28, 2017 | by Ettinger Law Firm

Typically, many people tend to think an estate plan only includes your Will. In today’s day and age, however, most people have a much more diversified estate plan than they realize. Your estate plan is far more than just your Will and includes things like trusts, investments, retirement accounts, and insurance policies. One of the challenges of comprehensive estate planning can be understanding how these assets work and to whom they should go to. Recently, Forbes explored the way several assets within a typical estate plan usually work and understanding this could be an important part of your estate planning decisions.

Wills and Trusts

Those selected to benefit from assets distributed through a Will may have to wait a little longer than if you were to use a trust or other vehicle to distribute such assets. Wills are required to go through the probate process to prove that they are valid and to make sure they comply with the law. Typically, assets within a Will cannot be touched until the probate process is complete. While the probate process in New York is easier than elsewhere, it can still be time-consuming especially for an individual that may need immediate access to the assets in your Will.

Anticipating Tax Reform with Your Estate Planning Strategies

Published on: June 17, 2017 | by Ettinger Law Firm

The current makeup of the federal government makes it very likely that some type of tax reform will happen within the next couple of years. Many individuals that have comprehensive estate plans in place or are considering engaging in creating a comprehensive strategy may have questions about how such tax reform could impact their estate plan. Recently, WealthManagement.com published an article discussing some approaches to estate planning while waiting to see how tax policy develops.

Tax Policy and Your Estate Plan

You must not underestimate the potential impact that tax policy can have on your estate plan. For individuals with larger estates with values that surpass the current estate tax exemption of $5,490,000, taxes play an even bigger role. If your estate is valued above the estate tax exemption, you have a variety of tools at your disposal that can help you alleviate some of the financial burdens imposed by taxes. Perhaps you will utilize your annual gift exemption to distribute some of your assets during your lifetime. You may end up creating a trust and title some of your assets under the trust instead of in your own name. Whatever tools you utilize, and even if the value of your estate falls within the estate tax exemption, taxes play a crucial role in the design and implementation of your estate plan. An experienced estate planning attorney can and should help you understand exactly how taxes might affect your personal estate plan and can also help you stay abreast of new developments in tax and other laws that could impact your estate plan.

The Difference Between a Trust and Payable on Death

Published on: June 14, 2017 | by Ettinger Law Firm

In the past, a trust was something that seemed useless for many Americans. It was a term often used to refer to the bank accounts of wealthy individuals. However, trust can be useful tools for many individuals. You don’t have to be a millionaire to make use of them, either. They can be an effective part of a comprehensive estate planning strategy that help you provide your loved ones with financial security after your death. While trusts are much more accessible than they once were, there is still confusion surrounding them. Many people wonder why they need a trust if they have listed assets as payable on death to another individual. While payable on death accounts can be an effective way of naming a beneficiary for those accounts, there are some limitations that can be addressed by a trust.

Payable on Death Limitations

The largest limitation of a payable on death structure is that while it will allow you to name a beneficiary for the asset in question and thus avoid the need to probate such assets, it typically only allows title to the asset to pass upon your death. In other words, if you become incapacitated while still alive, the person the account is meant to pass to may not be able to access the asset. Additionally, not all types of assets can be listed as payable on death, which leaves things like personal property in limbo in case of your incapacitation or death.

Removing a Trustee in New York

Published on: May 21, 2017 | by Ettinger Law Firm

Selecting the right trustee to administer your estate is a crucial part of ensuring that your assets are distributed according to your wishes and that your estate is settled correctly. While many people can and should put a great deal of thought into selecting a trustee to administer their estate, the process of selecting a trustee often stops there. Whether a trustee is a financial institution, attorney, or close family friend, you need to include a mechanism to remove that trustee if the need to do so arises. An experienced estate planning attorney can help you design this type of mechanism, which could help your loved ones avoid the often-lengthy legal process of removing a trustee in the absence of formal instructions.

When can a trustee be removed?

There are many reasons you may wish to revise your estate’s trustee. Perhaps you originally selected a family member that has become estranged because of divorce. You may have selected a sibling that has predeceased you. If you nominated a financial institution, it could have been bought out by another company that you don’t want to deal with. Whatever the reason for wanting to remove a trustee, New York law states that the following constitute some legal reasons for a court to remove a trustee:

Estate Planning and Buy-Sell Agreements for Your Business

Published on: May 16, 2017 | by Ettinger Law Firm

Comprehensive estate planning can be an extremely complicated process for an individual. This is even more true when the individual owns a business. The owners of closely held businesses own businesses with a limited number of shareholders and the stock in such businesses is not regularly traded publicly. While this type of business can provide many benefits for business owners, it can also create issues when one of the business owner dies. However, structuring a buy-sell agreement for a closely held business can help make estate planning easier when it comes to your interest in such a business.

Redemption Agreements

With a redemption agreement, the company itself purchases a life insurance policy on the various owners of the company. When one of those owners die, the sole owner of the life insurance policy – in this case, the company – will receive the benefits of the life insurance policy and can buy back the deceased shareholder’s shares. There are some potentially negative tax consequences for this type of arrangement, including the possibility of the business to be subject to the current corporate alternative minimum tax on the proceeds from the life insurance policy.

Tips for Selecting a Guardian for Minor Children

Published on: May 13, 2017 | by Ettinger Law Firm

Comprehensive estate planning is a deeply personal process. There are so many different factors to consider, and working with an experienced estate planning attorney can help streamline the process and ensure that you explore all of the aspects of estate planning that pertain to you. One of the most difficult parts of comprehensive estate planning is selecting a guardian for your minor children if both parents should become deceased or incapacitated at the same time, leaving neither able to care for any shared children. As difficult as the process can be, it is extremely important to undertake it so that the best interests of your children are provided for in a worst-case scenario. The following are some tips in approaching the guardian selection process and provide some important considerations for you to remember when selecting a guardian, and an experienced estate planning attorney can help you with the process.

Choose Compatible People

Most people put a great deal of planning and thought into how they choose to parent. It is important for your peace of mind as well as your children’s well-being that you select individuals that share a similar parenting style and outlook. If academics are important in your household, make sure that they are also important to prospective guardians. Additionally, making sure that individuals you are considering as guardians are ready to undertake the responsibility that comes with it is extremely important.

Long-Term Care Insurance and Estate Planning

Published on: May 2, 2017 | by Ettinger Law Firm

Almost every post, we remind people that estate planning is a comprehensive undertaking that has many different options that can be tailored for individual needs. Experienced estate planning attorneys can help clients understand the role that different option can play in the estate planning process. Another vehicle that can provide individuals and their loved ones with financial security is long-term care insurance. With the growing cost of medical care and the average life expectancy of people reaching 65 today at approximately 85 years of age, high healthcare costs can become a severe drain on a family’s financial resources. However, planning for the cost of long-term medical care can help you maintain the bulk of your estate to distribute to your heirs as you see fit.

What Is Long-Term Care Insurance?

Long-term care insurance not only protects your heirs from the expenses associated with caring for elderly family members, but can also help you prepare for the costs of caring for your aging family members. The purpose of long-term care insurance is to help offset the costs of long-term care that can come with age. For instance, caring for an aging family member that has developed cognitive impairments such as Alzheimer’s disease can sometimes require a daytime visiting nurse while you and your family are at work and/or school, or even around-the-clock medical care in a nursing home facility.

Fives Ways to Protect Your Estate Plan

Published on: April 28, 2017 | by Ettinger Law Firm

Estate planning should be a lifelong process. It is never too early to start the estate planning process, even with minimal assets at a younger age. Once you have a comprehensive estate planning framework in place, it is important to update it as life events change your circumstances. Much like your life is always evolving, so should your estate plan. It must be reviewed on a regular basis to ensure it is up-to-date and continues to comply with changes in laws governing it. When you put this much time and effort into such an important component of protecting your loved ones, it is important to ensure there are mechanisms in place to protect it. The following suggestions, adapted from a recent article from CNBC, can help you ensure your estate plan is secure.

Pre-Paid, Pre-Planned Funerals

When a loved one passes away, it can be an extremely difficult experience. One of the most difficult parts of the grieving process is trying to make funeral arrangements while grieving, and funeral expenses can often be very high. By pre-paying for your funeral arrangements, you can spare your family from the unexpected costs related to funeral expenses while also saving yourself money by locking in prices before they grow over time. Pre-planning your funeral arrangements allows you to ensure that your wishes for your funeral are carried out and help your family avoid stressful decisions during the grieving process.