Estate Planning

Back to the Basics: Trusts Are Not Only For the Wealthy

Published on: October 31, 2013 | by Ettinger Law Firm

One of the biggest misconceptions about general estate planning is that a “trust” is something that only rich families need to consider. This perception likely arises from colloquial use of “trust funds” to signify wealthy individuals who are living off substantial earnings preserved for them in a trust.

A better understanding of the legal tool takes away much of the mystique. The bottom line is that trusts are for everyone, serving as an incredibly useful option for middle class New Yorkers to protect assets accumulated over a lifetime for themselves and their loved ones.

The Basics

Deathbed Planning: In the Face of Serious Illness

Published on: October 25, 2013 | by Ettinger Law Firm

Most estate planning advice stories include one theme over and over–plan early and update consistently. Because no one know what the future holds and life changes occur frequently, it is critical to ensure your legal planning will work as you want it to when you need it.

However, that does not mean that there is ever a point when it is too late and not worth crafting a plan. Taking the time to put affairs in order even in the midst of serious illness or terminal conditions can make a world of difference for a family. A recent article provides a helpful discussion that touches on some of the key issues with regard to “deathbed planning.”

Late Estate Planning

Estate and Financial Planning Difficulties with Same-Sex Divorce

Published on: October 18, 2013 | by Ettinger Law Firm

Earlier this year, the Supreme Court’s Decision in Windsor v. U.S. allowed same-sex couples to receive the same federal benefits as other married couples. This has had enormous implications for estate planning for same-sex couples, as was previously covered generally here, and more specifically here for retirement issues, and here for recent IRS guidance. However, there are still many challenges and uncertainties facing same-sex couples since the ruling.

One area providing significant confusion is how divorce will affect same-sex couples. Although same-sex marriage is available in 13 states and the District of Columbia, couples that establish residences outside of those states may not be able to obtain a divorce. In states like Virginia that do not recognize same-sex marriage, gay couples cannot get a divorce (In essence, because the state does not recognize the that the couple’s marriage ever happened, it has no power to grant them a divorce). Moreover, if the couple does not have a legal residence in a state that does allow for same-sex divorce, they may not be able to obtain a divorce there either.

Even if the couple can obtain a same-sex divorce in their state, courts are often unsure how to handle a same-sex divorce. Take the case of Margaret Weing, a New York rabbi who got divorced earlier this year. Although she had only been married to her partner since 2008, she had lived with her partner in a registered domestic partnership since 1996. Weing and her partner had raised children together, merged their finances, and made each other beneficiaries of each other’s pensions and life insurance policies. They had also made each other executors and health insurance proxies, and had given each other power of attorney. Yet, when the New York court heard their case, the court would only divide assets accumulated starting from when the couple married in 2008.

Criminal Charges for New York Estate Executor

Published on: October 16, 2013 | by Ettinger Law Firm

You have probably heard the term “Executor.” Under New York law, this is the name given to the person (or trust company or bank) that is named in a Will and instructed to carry out the decedent’s wishes as outlined in a Will. Executors are entitled to a fee for their work, and it is usually paid out of the estate itself.

While friends and family members are often named as executors, the required duties can be complex. They include collecting assets and paying debts, expenses, and taxes. The process usually takes months (if not longer) and involves tricky procedural chores. Making mistakes can result in significant personal liability to the Executor, and so it is important that no party is surprised by their duties or uncomfortable with the work.

Make a Careful Choice

Tragic New York Murder Case, Inheritance, & “Son of Sam” Laws

Published on: October 9, 2013 | by Ettinger Law Firm

What happens if someone who intentionally causes a death is due to inherit from the person who died? Is the wrongdoer still able to profit from his or her actions?

In general, the answer would be negative. New York passed a statute known as the “Son of Sam” Law which essentially prevents a criminal from profiting from their crimes. This state law overlaps with a long-ago established common law principle known as the “slayer rule” which more directly affects inheritance issues, preventing someone convicted of causing a death to then profit by inheriting from the deceased person.

These rules are not new. But sometimes unique cases pop up which are hard to fit perfectly into the older rules, usually sparking legal challenges.

Will The Government Shutdown Affect Your Estate Planning?

Published on: October 3, 2013 | by Ettinger Law Firm

News this week is dominated by one topic: the federal government shutdown. Like most others, you may be wondering how (or if) the developments out of D.C. will affect you.

The Background

The shutdown itself is caused by Congress’s failure to pass an appropriations bill allowing for the spending of money to fund day-to-day government operations. More specifically, Republicans in the House of Representatives are refusing to pass a bill that includes funding for the Affordable Care Act. Usually disagreements about these issues are handled separately from daily government funding, but the House GOP has combined the issues and refused to budge, leading to the shutdown.

Mysterious Will Filed in New York Intestate Case

Published on: September 26, 2013 | by Ettinger Law Firm

Earlier this year we shared information about a $40 million New York inheritance that was destined to go entirely to the government. 97-year old former NY developer Roman Blum died in January, leaving behind the multi-million dollar estate. Yet, it seems that Blum conducted no estate planning–no trust was created and no will was found. Not only that, but it was unclear if he had any living relatives. As a result, per intestacy rules in the state, the assets would eventually “escheat” to the government. This represented the largest unclaimed estate in New York history.

The case is often pointed to as a vivid reminder of the need to lay out your inheritance wishes ahead of time or risk losing control of the decision entirely.

Will is Found?

Financial Advisors Discuss Ways to Save on Increased Capital Gains Taxes

Published on: September 19, 2013 | by Ettinger Law Firm

Many New Yorkers know that, as part of the federal tax package compromise that was passed on January 1st of this year, the capital gains tax rate was increased. Last year the top rate was 15% but that is now up to 20%. In addition, some individuals will also face a 3.8% investment surcharge tacked on top.

Prudent estate planning always takes tax considerations into account, and transferring assets which have accumulated in value is one of the most important (but trickiest) aspects of the process. As such, it is prudent to closely consider ways to legally save on taxes, particularly considering the new rates.

Forbes on Capital Gains

Huguette Clark Estate Negotiations Fail, Set for Trial

Published on: September 12, 2013 | by Ettinger Law Firm

When most people envision legal trials, the first images that pop to mind involve bizarre crimes or large class action lawsuits. Thanks to movies and television shows, there is an assumption that trials are only for deciding whether someone is going to prison or if a large corporation acted inappropriately and hurt hundreds of innocent community members.

But believe it or not, trials actually stem from far less salacious situations–even disputes over wills and trusts.

$300 Million Estate Fight

Tax Evasion Case – Hiding Inheritance from IRS

Published on: September 10, 2013 | by Ettinger Law Firm

One important purpose of estate planning is to ensure that as many assets as possible pass on to friends, families, and charities–instead of Uncle Sam. Using trusts and other legal arrangements to structure an inheritance is a prudent move for all New York families, but particularly those with sizeable assets. Taxes at both the state and federal level can take a significant chunk out of any inheritance. There are many high-profile cases of individual who failed to take advantage of all the planning tools at their disposal, resulting in an inflated tax bill. The estate of actor James Gandolfini’s, settled in New York, is just one recent example of how millions can be lost to taxes.

Illegally Cutting Corners

Unfortunately, some families may be tempted to cut corners and resort to illegal conduct in order to prevent the government from collecting on a large tax bill. The temptation to act in this manner is even higher when prudent estate planning is not conducted at the outset.