Estate Planning

Back to the Basics – New York Intestate Succession

Published on: February 12, 2017 | by Ettinger Law Firm

Recently we published a blog about the difference between probate and non-probate assets . Probate is the legal process that occurs after a person’s death in which a court determines if a valid will exists and takes care of various legal aspects related to things like debts and distribution of probate assets. Usually, probate assets include assets that are owned individually and not governed by a contract. When a person dies without a valid will in place, a court will determine how your assets should be distributed according to your state’s law. However, this may not always be in line with your personal wishes.

What is intestate succession?

Intestate succession is the legal term used to describe the process by which a court will distribute your assets upon your death once other obligations, like debts, have been addressed if a person dies “intestate.” Dying intestate means that an individual is deceased but has not left a valid will. It is important to remember that not all wills are automatically valid, and there are certain statutes in each state that define what qualifies as a valid will. Each state has their own statutes governing the “line of succession,” a term used to refer to the path courts follow in distributing your assets if you die intestate.

Important Estate Planning Considerations for Business Owners

Published on: February 7, 2017 | by Ettinger Law Firm

While many individuals only need to worry about personal assets, some also need to make plans for the future of their business upon their death. In fact, one of the most essential components of owning is a business is ensuring that it will remain viable should you be unable to. As businesses tend to be owned individually, they usually qualify as an asset that must go through probate. Estate planning can take into account various aspects of business ownership and help ensure that your wishes for your business are carried out as you see fit. You can nominate a person or persons to take ownership of your business, create a financial plan for your business, or do numerous other things that will ensure your hard work continues to thrive the way you would like it to. There are several reasons why it is important for business owners to make provisions for their business as part of their estate plan.

Risk

Failing to create a comprehensive estate plan for a business that you own puts your hard work at risk. A business could potentially end up in probate with various people vying for ownership, which could spell trouble for the business itself as well as its profits. You also risk your business traveling down the line of succession in New York to an individual that you may not want in charge.

Are You Subject to the Estate and/or Gift Tax?

Published on: February 5, 2017 | by Ettinger Law Firm

Taxes are never fun, but when it comes to estate planning taxes are a major concern for most people. Understanding the different types of estate taxes is an important part of creating a comprehensive estate plan to distribute your assets after you are deceased. To help you understand more about the estate tax and gift taxes, which are two common types of taxes many people are subject to in estate planning, the following information provides a brief introduction as to what these taxes are and when they may come into play for you.

Estate Tax

The good news about the federal estate tax is that, according to the IRS, most simple estates do not require filing an estate tax return. This is because only estates for decedents dying in 2017 valued at $5,490,000 or more are subject to this tax. Generally, the estates exempt from this tax are adjusted for the annual rate of inflation, so the value of exempt estates can change from year to year. As a general rule, marital gifts – or those where an estate passes to a surviving spouse – are wholly exempt from the federal estate tax, which does not kick in until the estate passes down the line to a person’s heirs. For estates valued at or over the legally prescribed threshold for the federal estate tax that pass to heirs, the maximum effective tax rate is 40 percent. There are many steps involved in computing what qualifies as your taxable estate as well as deductions that may change the value of your estate which can be discussed with an experienced estate planning attorney to help you make choices about your assets that will ease the financial tax burden that could otherwise accompany the distribution of your assets.

Life Estates and the Generation-Skipping Transfer Tax

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

When you make the decision to see an experienced estate planning attorney to make a comprehensive estate plan to safeguard your assets and provide for your heirs, it can be a confusing process filled with a lot of legal terminology that might be new for most people. One of the biggest considerations in estate planning, and often one of the most confusing parts of it, is the effect taxes will have on an estate. To help you make the most informed decisions about what route you choose in planning your estate, it is important to have a full understanding of the different types of taxes that may come into play. One of those is known as the generation-skipping transfer tax, and the following information may be helpful in understanding it.

Life Estates

To fully understand the generation-skipping transfer tax, you first need to understand what a life estate is. A life estate is a type of estate in which ownership of real property – basically, a home and the land which accompanies it – is passed to another person and ends upon that person’s death. At that time, it may revert back to the original owner or it could pass along to someone else depending on the conditions you choose to set. In New York, life estates can be an easy way to ensure real property passes smoothly upon death without the need for probate. Life estates are also exempt from the federal estate tax. Usually, creating a life estate is a simple process, as is the transfer of property upon an owner’s death.

Important Reasons to Revise Your Estate Plan

Published on: January 31, 2017 | by Ettinger Law Firm

Creating an estate plan is an effective way to ensure that your assets are distributed according to your wishes while minimizing hardships that could otherwise result for loved ones and friends. However, creating a comprehensive estate plan is often just the beginning and there are important reasons why you can and should revise your estate plan. A recent article from Forbes lists the following as important reasons to revise your estate plan:

Significant Changes in Value of Estate

A significant change in the value of your estate may be reason for you to reevaluate how you want your assets to be distributed. You may wish to increase the number of people you include as heirs or adjust the amount you have chosen to distribute. A significant change in the value of your estate should be accompanied by appropriate revisions to your estate plan.

Changes in Retirement Could Mean Changes to Your Estate Plan

Published on: January 27, 2017 | by Ettinger Law Firm

The financial market is expansive and can change overnight. NextAvenue.org recently wrote about several important ways retirement is likely to change in 2017 that could impact millions of people and require you to engage in or reevaluate your estate planning. According to the article, several things you should pay attention to include:

Tax Cuts Are Likely

Tax laws are continuously changing, and the new administration has proposed some rather significant changes to the tax code. If these changes become a reality, it may important for people to look at investments like their IRA and convert it to a more tax-friendly asset, like a Roth IRA. This can help investors and those planning retirement accounts to take advantage of more favorable tax consequences that could help them keep more of their money in the long run.

Social Security and Your Estate

Published on: January 25, 2017 | by Ettinger Law Firm

With every new change in presidential administration, there are certain to be ripple effects in national programs that reflect the new direction those programs are being geared toward. Often, there is a period of uncertainty connected to funding for many public programs, especially in times of financial crisis. One such important program that millions of Americans depend upon is social security. In today’s day and age, it is difficult for retirees to exist solely on social security, which is one of the reasons responsible estate planning at an early age can help you navigate your retirement years successfully. With potential changes to the way social security updates beneficiaries on their benefits, it may be even more important to consider a comprehensive investment strategy as part of your estate planning.

Fewer Social Security Mailings

According to Laurence J. Kotlikoff, featured expert on NextAvenue.org, the United States Social Security Administration has recently announced that it will be providing fewer earnings and estimated benefits statements to beneficiaries as it moves forward. The agency quietly announced this change as a way to save it more money, stating Congress had cut its budget by 10 percent in the last seven years even though there has been a 13 percent increase in beneficiaries. According to the article, the agency has typically mailed such statements approximately every five years to people not receiving benefits between the ages of 25 and 60, and annually every year after 60. The agency estimates reducing the frequency of such mailings will save it more than $11 million in 2017.

Protecting Yourself from Elder Financial Abuse

Published on: January 22, 2017 | by Ettinger Law Firm

All too often, unscrupulous people attempt to take advantage of others. This is especially common with elderly individuals. When this happens, it is known as elder financial abuse, and it can have a significant negative effect on your estate. Recently, USA Today reported on this growing problem by discussing testimony from a hearing before the U.S. Senate Committee on Aging. Below are important steps that you can take to protect yourself and your assets.

Understand Risk Factors

When elderly people face cognitive impairment, this increases the risk that they will be taken advantage of. Additional risk factors include individuals that attempt to isolate an elderly person from their family, friends, or community. Doing so can put an elderly person at increased risk for elder financial abuse.

Back to the Basics – Pet Trusts

Published on: January 18, 2017 | by Ettinger Law Firm

In a recent blog, we discussed pet owner’s options for naming their pets as beneficiaries in their wills. Another option for pet owners to provider for their pet after death is creating a pet trust. Pet trusts offer a wide variety of options to provide for the pet and can be used in conjunction with a will. Pet trusts are created during the grantor, in this case the pet owner’s, life, and can take effect immediately, or upon death of the grantor.

Unlike wills which leave interpreting some provisions up to the discretion of probate court, trusts are legally enforceable agreements that are carried out according to the provisions of the document. All the traditional rules of trust administration will be in effect for a pet trust as they are for any other trust. There will be a trustee named which will carry out the best interests of the maker of the trust and will be able to enforce the terms of the trust in court if necessary.

One feature of a pet trust that is distinct are the caretaking options. When establishing a pet trust, the maker can name who will take care of their pet in the event of incapacitation, who will have immediate custody upon your death, and how the animal is cared for.

Can Elderly Parents Be Claimed as Dependents?

Published on: December 16, 2016 | by Ettinger Law Firm

Healthcare coverage has been an unsure and confusing issue for both young and elderly citizens over the past decade, with the potential to only become more complicated as a new president takes office. While laws have been amended throughout President Obama’s term to now allow young adults to remain covered under their parents insurance until they are 26 years old, there are no hard rules regarding whether parents can qualify under their adult childrens’ health insurance plans.

Narrow Exceptions To Covering Parents

There are limited situations in which an adult child could get their elderly or ailing parent covered under their company’s insurance provider, however, they must meet a number of requirements. Parents can be covered under their child’s insurance plan if they can qualify as a dependent and meet specific criteria. Dependents traditionally have been considered those children under the age of 26 who do not maintain coverage, spouses or domestic partners, however, parents can qualify generally if they meet the IRS definition of dependent upon their adult child.