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Using Beneficiaries as Part of Your Estate Plan – Part II: Considerations

Published on: October 13, 2015 | by Ettinger Law Firm

An earlier post on this blog provided an overview of using beneficiary designations as part of your estate plan. Recall that beneficiary designations are a way to transfer property automatically upon the death of the asset owner outside of the probate process. This post is part II of that discussion, and include some of the pros and cons of using beneficiary designations, as well as a few special considerations related to certain forms of beneficiary designations.

Pros and Cons of Using Beneficiary Designations

Beneficiary designations can be a simple and effective mechanism to transfer your property in much the same a will or trust distributes your property. The advantages of beneficiary designations include the ease in which it can be set up and the speed and in which the beneficiary receives the asset. Also, the owner of the asset has flexibility to designate any of combination of shares to any number of primary and contingent beneficiaries. Beneficiaries may be individuals, trusts, charities, or the property owner’s own estate by way of its personal representative.

Estate Planning Basics – Planning for Incapacity

Published on: May 18, 2015 | by Ettinger Law Firm

While the main purpose of an estate plan is to distribute assets to your loved ones after you are gone, it can also serve an important purpose while you are alive – planning for your potential incapacity. An estate plan can provide instructions for the management of your assets, payment of expenses, and personal instructions for your care if you become unable to communicate those decisions on your own.

Importance of Planning for Incapacity

Planning for incapacity is important for everyone, but it is especially important for unmarried partners. Typically, the spouse of an incapacitated person is named as the administrator for financial, legal, and medical needs. However, unmarried partners are not always named as the administrator, and a blood relative may be named instead.

What to Do When You Inherit Your Parent’s Home

Published on: October 27, 2014 | by Ettinger Law Firm

According to the Boston College Center of Wealth and Philanthropy, the Baby Boomer generation stands to inherit over $27 trillion in the United States alone over the next four decades. A large portion of that wealth is invested into your parent’s home, but when you inherit the house it can come with emotional and financial issues. When siblings are involved in the decision making process, deciding what to do with the home can be even trickier.

There are three options that you can elect after you have inherited your parents’ home: sell it, move in, or rent it. Each choice comes with its own advantages and disadvantages, emotionally and financially, for you and your siblings.

Selling the House

Estate Planning Tips for Business Owners

Published on: July 17, 2014 | by Ettinger Law Firm

Many people, business owners and everyone else, are concerned about the federal estate tax when creating their estate plans. Although the federal estate tax is 40%, it does not apply unless the decedent has an estate worth over $5.34 million, and the estate amount is doubled if the person is married. However, there are other concerns besides the federal estate tax that a business owner should take into account when creating an estate plan.

Other State and Federal Taxes

The estate tax should be the least of a business owner’s worries when creating an estate plan. Before an estate tax is even considered other state and federal taxes are first deducted from a business and the estate. The federal income tax rate on an equity owner of a business can top out at 44.6%. State income taxes compound the issue by charging even more on an equity owner’s share. A business owner should first try and minimize the damage done by income taxes on his estate before dealing with the possibility of an estate tax.

Lawyer Developing Online Estate Planning Game

Published on: June 11, 2014 | by Ettinger Law Firm

An attorney is developing an online game aimed at teaching its players about estate planning. Stephanie Kimbro has created a demo for the game, “Estate Quest,” where the player is a detective who is given various cases about people who did not plan their estates correctly. The player is taken back in time and given clues about what the person should have done in his estate or written in his will. Examples include naming a guardian, specifying bequests to certain people, or naming an executor.

Using Crowdsourcing for Legal Products

Ms. Kimbro has been utilizing online crowdsourcing such as Rockethub as a means to develop her game. Crowdsourcing websites allow developers to explain their idea to everyone on the internet, and if people want to invest in the idea they donate money to the venture. Crowdsourcing is also a good tool for gauging interest in potential products. Ms. Kimbro is interested to learn about how crowdsourcing can be used to advance legal services projects, and she is using Estate Quest as a test product.

Putting Conditions on a Trust in New York

Published on: May 13, 2014 | by Ettinger Law Firm

For many New Yorkers, the term ‘trust‘ continues to invoke visions of the super wealthy. Similarly, terms like “trust fund baby” are used to refer to spoiled, rich individuals who do no work on their own and simply live off their parents savings. The connotation is always negative.

As our estate planning attorneys often explain, however, trusts are critical tools for families of all income levels. And there is no reason why children who benefit from the trust suddenly become slovenly or without their own motivations. For one thing, many trusts are not large enough to offer income that can last a lifetime. Even when the trust is large, conditions can be placed on child-beneficiaries which can help prevent them from relying solely on an unlimited stream of income.

Incentivizing a Trust in New York

Estate Fights for Music Royalties in the Digital Age

Published on: April 14, 2014 | by Ettinger Law Firm

Estate planning can have ramifications decades (or even centuries!) after an individual passes away. On one hand, this is true because how one leaves assets and guidance to others can influence their long-term personal legacy. More specifically, however, planning can dictate legal matters far into the future. Whoever is in control of administering an estate has significant control over how some of those legal issues are handled.

Sudden Celebrity Death

Consider a dispute that recently arose between the estate of Rick Nelson and Capitol Records. Nelson was a popular musician an actor in the 50s, 60s, and 70s, best known for his role in the TV series “The Adventures of Ozzie and Harriet.” Unfortunately, Nelson died unexpectedly in a 1985 plane crash at the age of 45.

What if a Beneficiary Dies First?

Published on: March 12, 2014 | by Ettinger Law Firm

Of the many estate planning lessons pulled for the tragic death of Philip Seymour Hoffman in New York last month is the need to properly update your documents. Hoffman’s will was drafted nearly ten years earlier. It had not been changed to reflect his new life circumstances, particularly the birth of two more children. While his first son was left assets in trust, there was no mention of his two daughters.

This is a common problem when an estate plan is outdated. In addition, the opposite problem can also arise. Instead of failing to account for a new birth, a plan can also miss the fact that one has died. Many New York residents may have questions about what happens when someone set to inherit per the terms of a will or a trust beneficiary is not alive.

“Anti-Lapse” Statute in New York

New York Estate Planning – No Child Left Behind?

Published on: February 26, 2014 | by Ettinger Law Firm

Some New Yorkers eschew an estate plan because they assume their wishes are very simple. “I just want the kids to split it” is a common refrain. For one thing, default rules in the state do not automatically mean that children will split a parents’ assets. The only way to do that is by ensuring you have a properly updated will, or, even better, use trusts to protect assets and streamline the process.

Even when residents wish to split their assets between the children, mistakes are made all the time. Take, for example, the recent high-profile passing of actor Philip Seymour Hoffman. The 46-year old passed away tragically earlier this year inside his New York City apartment. Recently, his will was made public and problems were quickly pointed out.

Perhaps most notably, the will was written ten years prior. The provisions specifically created a trust for Hoffman’s oldest son, who was then an infant. After the will was drafted, Hoffman had two additional children, but there is no mention of them in the older will. As a result, it is unclear what, if anything, they will inherit directly from their father’s estate. New York law provides some protection for unintentionally disinherited children, but the law can be murky in some cases.

Growth of Online Memorial Services

Published on: February 13, 2014 | by Ettinger Law Firm

Making preparations for funeral services, burial preferences, and other memorial issues is a natural part of New York estate plans. These details have been a staple of the mourning and remembrance process for centuries. However, if trends continue, a new form of memory may be added to many plans: professional, digital tributes.

Online Memorial Websites

The stratospheric rise in popularity of online social networks and blogs should make it no surprise that remembrances for lost loved ones are moving online. Placing an obituary in the local paper or buying a memorial ad on the yearly anniversary is no longer the only way to share information about a passing and gracefully remember those who are gone. The process has moved online.