New York Estate Planning & Elder Law Blog

Slayer Statutes and Inheritance

Published on: June 1, 2015 | by Ettinger Law Firm

Like something out of a made for television movie, last week a woman was sentenced to 23 years in prison for the murder of her eighty year old mother-in-law for the inheritance. It is one of the rare times that a set of laws known as the “slayer statutes” has been applied to a criminal case but serves to highlight the importance of these laws. These statutes prevent a person who has murdered another from inheriting from their victim’s estate.

Facts of the Case

In this case, Diana Nadell was arrested and convicted of the murder of her mother-in-law, Peggy Nadell. The reason behind the killing was that Diana wished to obtain the inheritance from Peggy’s estate, which was worth a little over $4 million. Diana and her husband were expected to inherit half of the estate, but Diana could not wait for her mother-in-law to pass away naturally.

Virtual Representation of Minors and Beneficiaries

Published on: May 29, 2015 | by Ettinger Law Firm

While parents make the vast majority of decisions for their children, it comes as a surprise to many that they cannot automatically make decisions regarding a trust or estate in their child’s name. Estate law protects the interests of the beneficiary above all others, even from the parents of a minor beneficiary. If a parent is not able to sign for their child’s trust or estate, a court appointed guardian is assigned that is also known as virtual representation.

Virtual Representation

The concept of virtual representation occurs when an adult is appointed to speak on behalf of a minor trust beneficiary. Many of the provisions regarding virtual representation are found in the Uniform Trust Code (UTC), Uniform Probate Code (UPC), and state laws. Essentially, virtual representation gives a minor beneficiary the power to speak through an adult that actually has legal capacity to make decisions. A virtual representative can be appointed for minors, incapacitated adults, unborn children, unascertained beneficiaries, and adult beneficiaries that cannot be found.

Federal Government Looks to Restrict GRATs

Published on: May 25, 2015 | by Ettinger Law Firm

The White House recently released its budget proposal for 2016, and one of the major aspects of the plan is to restrict the use and effectiveness of a common estate planning tool: grantor retained annuity trusts (GRATs). The administration has proposed limitations on the use of this estate planning technique in the past, but this is the first time that real change may be enacted in the way that people can use GRATs in their estate plan.

What is a GRAT?

A grantor retained annuity trust is an irrevocable trust that is designed to distribute assets from the trust with little to no gift tax attached. In order to properly establish a GRAT, the creator of the trust places assets into the trust that he cannot touch in exchange for receiving a small portion of those funds through annuity payments over a number of years. The distributions are kept just under the federal gift tax limit so that no federal taxes apply to the distributions.

Long-Term Estate Planning Requires Flexibility

Published on: May 22, 2015 | by Ettinger Law Firm

One of the main challenges for families with wealth is planning for more than a single generation. With the uncertainty of the world, advances of technology, economic upheaval, and more many people are concerned about how to plan for decades or even a century down the line. However, there are ways to plan your estate that can provide for children, grandchildren, and subsequent generations as long as you are willing to plan with some level of flexibility.

Issues with Multigenerational Planning

“People, especially the first generation to have wealth, do have concerns about the future and they aren’t used to thinking in multigenerational terms.” Many legal and financial planners have found that it is difficult for people that have first generation wealth to think past giving to the next generation. This is because they first must adjust to managing that kind of wealth on their own before thinking about transferring it to their children, let alone passing it to subsequent generations.

Elderly Citizens Force Cities to Reevaluate Structure

Published on: May 22, 2015 | by Ettinger Law Firm

Most people consider elderly issues as problems with nursing homes, Medicaid, Medicare or Social Security. While these are important problems that need to be addressed with our nation’s seniors, the number of elderly residents in cities is forcing them to rethink everything about their infrastructure.

Growing Number of Elderly in Cities

The Organization for Economic Cooperation and Development (OECD) has released a new report detailing the growing number of seniors in our country’s largest cities. According to their report, between 2001 and 2011 the number of elderly ages 65 years and older living in well-developed cities has jumped by 24%. This is more than three times the rate of growth for these cities overall. By 2050, the report estimates that over one-quarter of these cities’ populations will consist of elderly people, and the fastest growing population is seniors ages eighty years old and older.

Estate Tax Planning Avoids Liquidation of Estate

Published on: May 20, 2015 | by Ettinger Law Firm

The House of Representatives recently passed a bill that would eliminate the federal estate tax. The bill is expected to pass in the Senate but be vetoed by the President, thus most likely preventing it from becoming law. However, the bill does bring up an interesting aspect of the federal estate tax, namely, how small businesses and family farms need to estate plan in order to protect their assets.

Federal and State Estate Taxes

Currently, the federal estate tax applies to any estate that is over $5.43 million, and any assets over that amount in the estate can be taxed up to forty percent. State estate and inheritance taxes vary and must be checked on a state by state basis; however, some states can take a significant portion of the estate’s worth if the assets are not properly shielded by an estate plan. For example, Ohio repealed its estate tax in 2013, but Maryland has both estate and inheritance taxes up to sixteen percent on estates worth more than $1 million.

Nursing Homes Can File for Guardianship to Collect Debts

Published on: May 19, 2015 | by Ettinger Law Firm

Few people realize that nursing homes can file for guardianship over their elderly or disabled residents in order to collect on unpaid debts. Even fewer experts have done research on how often nursing homes initiate proceedings or track their progress through the courts. However, what research has been completed on nursing home guardianships show that not only does the practice happen often, but it seems to be increasing in use.

Nursing Home Guardianship Statistics

The Brookdale Center of Healthy Aging and Longevity has been researching how often these types of cases occur in the state of New York. While it has not released its full report, the Center has stated that its research found that between the years 2002 and 2012, nursing homes accounted for over twelve percent of all guardianship cases in Manhattan. Outside of the city, guardianship petitions by nursing homes over their residents are also a significant percentage of the court requests. Overall, estimates show that as many as two-thirds of all guardianship proceedings across the country are petitioned by an institution or government entity.

Deciding if Family Should Run the Family Business

Published on: May 15, 2015 | by Ettinger Law Firm

Small, family-owned businesses make up the crux of our nation’s economy. In 2011, there were 28.2 million small businesses in the United States and they make up 99.7% of U.S. employer firms. Many small business owners hope to create a legacy where their family will take over operations once they decide to retire, but it does not always happen. Business succession planning is crucial to determining whether your family should inherit the business or if you should look to other options when you decide that you no longer wish to run the company.

Early Planning is Important

The earlier that you begin succession planning for the next generation, the better off your business will be. To start, have a conversation with the next generation about whether they see themselves running the business when you are gone. It can take over a year to develop a succession plan and between three to five years to implement.

Estate Planning: Who Gets the Vacation Home?

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

Many families purchase vacation homes that they and other generations in their family can all enjoy together. However, vacation homes can also lead to some serious family feuds when it comes to estate planning. One of the biggest mistakes in estate planning when a vacation home is involved is to leave the question of ownership, sharing, and other issues without a detailed succession plan. If a plan cannot be agreed upon with you and your loved ones, you may want to consider selling the home before any fights begin.

Selling the Vacation Home

Sometimes selling the vacation home makes more sense than leaving it to loved ones. Your children or grandchildren may not be able to afford the taxes, upkeep, maintenance, and travel to the home. In addition, the recovering real estate market means that your family could make some money selling the home that could be added to their inheritance. The money from the sale of the vacation home could also go to your long-term care or that of your spouse.

Financial Skills Often Slip With Cognition

Published on: May 12, 2015 | by Ettinger Law Firm

In cases of dementia, Alzheimer’s disease, and other issues with cognition, studies have shown that the ability to perform simple math problems and handling financial matters are often the first skills that slip away. Equally important is the research that shows that as people age, even elders that do not have issues with cognition may reach the point where making financial decisions can become incredibly challenging.

Seniors and Financial Skills

The issue of seniors handling their own financial affairs is significant in this day and age. Currently, there are 44.7 million people in the United States that are 65 years old or older, and they account for fourteen percent of the overall population. In a mere ten years, that number will skyrocket to around 66 million people, and this age group has trillions of dollars in wealth. Unfortunately, many seniors are left to manage their financial affairs on their own, despite losing the ability to do so.