Trusts

What Matters When Choosing an Executor?

Published on: November 1, 2013 | by Ettinger Law Firm

Understanding the specifics of the law is just one aspect of successful estate planning. Obviously it is critical that a will is created in a such a way that it will be upheld or that a trust will have legal effect (or that you take advantage of all available trust options to begin with).

But that legal knowledge is not enough to best prepare for the future. In addition, it is critical to understand the social, emotional, and practical considerations that affect these issues. Are certain family members more likely to feel jilted by a specific arrangement? Is there a financial danger that should be guarded against? These and hundreds of other questions must be considered when planning. Memorizing statutes and legal books will only provide so much guidance–experience on these issues fills in the gaps.

Advice for Executor Selection

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

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?

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.

Inadequate Retirement Worries? – Tips to Boost Your Savings

Published on: September 5, 2013 | by Ettinger Law Firm

Retirement saving. Those two works often strike immediate fear and worry in the heart of New Yorkers. It is hard enough for many families to meet their weekly needs, from mortgage payments to children’s tuition payments and everything in between. In the end, there is often little left over to stock away for one’s golden years. Add in the 2008 economic recession, which hurt many plans, and it is no wonder that New Yorkers are worried about the inadequacy of their retirement.

Fear not. Depending on your age, there is still time to put strategies in place to ensure access to resources for later in life. Even if you are knocking on retirement’s door, there are still steps that can be taken to catch-up.

Strategies from Forbes

Issues with Family Vacation Homes

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

Many New York families have vacation homes. While the reference often conjures up images of the super-wealthy wintering in palacial estates, the truth is that owning a second piece of real estate in a favorite location is not only for the elite. Middle class families who prudently save often decide to purchase a second home for investment purposes.

Considering the frequency of these homes, it is important for families to be aware of some financial and estate planning issues that they may create. A Forbes story from last week provides a helpful introduction into the topic.

Unfortunately, the use and future ownership of these homes is often cause for confusion, misunderstanding , and argument. For one thing, parents and children often have different ideas about the property. Is it meant to be a family keepsake that is passed down through the generations as a meeting place and memory maker? Or is it simply an investment item that can be sold if necessary without much thought? Often different family members have different levels of attached to these homes. One sibling may hold the location dear and never dream of getting rid of it while another may have few memories of the home and not wish to hold onto the property if it does not make financial sense.

GRATs – A Good Idea in this Low Interest Rate Environment?

Published on: August 6, 2013 | by Ettinger Law Firm

A post over at Think Advisor last week provides some helpful insight into one financial and estate planning tool which might be appropriate for some New York residents. The tool is know as a GRAT – Grantor Retained Annuity Trust. As with many other trusts, one key purpose of the GRAT is to minimize tax liability, particularly for those with significant assets.

How It Works

The basic concept behind the GRAT is straightforward. Assets are placed in trust. The grantor (person creating the trust) then retains the right to receive fixed payments from the trust. Those payment can last either for a set period of time designated in advance or over the grantor’s life. At the end of the trust’s life the assets placed in the trust then fall to the beneficiaries.

Think Twice Before Disinheriting A Child

Published on: August 2, 2013 | by Ettinger Law Firm

Families are complicated. No matter how well intentioned, virtually all family histories include some situations, dynamics, and incidents that cause immense disagreement, tension, stress, and frayed relationship. Virtually all families have some level of “dysfunction,” and no family is perfect.

Estate planning attorneys are acutely aware of this reality, as we worked with every manner of family on issues which must take into account their unique situations. Simply “splitting everything between the children” is not an ideal option for many. In certain cases parents have serious concerns about their child’s ability to manage an inheritance or the fairness of dividing things equally.

In the most extreme cases, some parents consider disinheriting a child altogether. This may be based on many different reasons: the child is estranged, they have significant means and do not need an inheritance, or perhaps they have drug and alcohol problems.

The 3 Generation Rule – Legacies the Last

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

You’ve built a nest egg after years of consistent work, prudent planning, strategic risk, a lot of focus, and a bit of luck. You want to retire peacefully and provide a legacy that will hopefully secure some degree of wealth for you family for generations to come.

But what are the odds of wealth making it decades (or even centuries) after you are gone? If history is any indication, most inheritances won’t make it long at all. Wealth surviving into the third generation only happens in one out of ten cases. As a recent Senior Independent story on the subject reminded, this principles takes the form of an often-used refrain: “Shirtsleeves to shirtsleeves in three generations.”

The story points out that over the course of their lifetimes about two-thirds of Baby Boomers in the United States will inherit about $7.6 trillion. Yet, those same individuals will lose about 70% of that wealth before passing any of it on to their own children or other relatives.

Estate Planning for Spouses: The Basics

Published on: June 7, 2013 | by Ettinger Law Firm

This week Forbes published an article that outlines the basics of how to fund an estate plan for spouses. The story is a helpful reiteration of many of the basic issues that are common for all New York couples thinking about their future and trying to create security no matter what the future holds.

Helpfully, the story explains how estate planning is not the creation of a stack of legal documents that are signed and then stored until needed. Instead, the process is far more comprehensive and involves examination of all of one’s assets, wishes, legacy interests, elder care goals, and more.

As a general matter, on the estate planning side, one of the main goals is avoiding probate at all costs. That means that something like a last will and testament is inefficient. Instead, for most New York couples it is best to create a series of revocable living trusts which are far superior, allowing property to be protected and passed to others without the need for court intervention. After the trust is created spouses transfer property directly into the trust.