New York Estate Planning & Elder Law Blog

The Four Basic Protections of Elder Law Estate Planning

Published on: August 28, 2020 | by Ettinger Law Firm

Elder Law Estate Planning is an area of law that helps us maintain control of our lives and assets in four basic areas.

First, Elder Law is planning for disability which includes naming people who will make decisions for us if we become incapacitated. You choose the people who will act on your behalf and thereby avoid the government taking over your life in a “guardianship proceeding.” Wills do not provide for disability because they are plans for death. Living trusts, on the other hand, name trustees who manage trust affairs during incapacity. Other necessary disability planning documents include a Power of Attorney that names people who make financial and legal decisions, a Health Care Proxy that names people who will make medical decisions and a Living Will that expresses end of life decisions such as resuscitation.

Second, another protection of Elder Law is asset protection planning from the costs of long-term care. Plan A to protect assets from long-term care and nursing home costs is to buy long-term care insurance. If you do not have long-term care insurance, Plan B is the Medicaid Asset Protection Trust (MAPT) that protects trust assets from nursing home costs paid for by Medicaid after the assets are in the trust for five years. The MAPT protects assets from home care costs paid for by Medicaid after the assets are in the trust for two and a half years.

How the New Rules Under the Secure Act Changes the Way People Will Inherit Money

Published on: May 12, 2020 | by Ettinger Law Firm

The Setting Every Community Up for Retirement Enhancement Act of 2019, Pub. L. 116–94, was signed into law by President Donald Trump on December 20, 2019, as part of the Further Consolidated Appropriations Act, 2020 (The Secure Act). Future beneficiaries of retirement accounts have different rules than current inheritors. What follows is a brief description of some of the ways the new rules under The Secure Act may impact your future beneficiaries.

The Secure Act changes the way people will inherit money — are you affected by the new rules?

The new rules do not treat all beneficiaries the same. Beneficiaries of qualified retirement accounts, such as individual retirement accounts and 401(k) plans, now must withdraw all of the money out of those accounts within 10 years, instead of over their lifetime as was previously allowed (commonly referred to as the “stretch IRA” provision). An IRA is an individual retirement account. There are no required minimum distributions within that time frame, but the account balance must be zero after the 10th year.

A Primer on Recent Financial Opportunity Zone Regulations

Published on: May 9, 2020 | by Ettinger Law Firm

In December 2019, the United States Treasury recently released guidelines in Subchapter Z of the Internal Revenue Code. the regulations play the vital role of clarifying earlier 2018 and 2019 regulations about financial opportunity zones. This article briefly reviews some of the most important lessons to be learned from this announcement.

The Role of Opportunity Zone Investment

The Tax Cuts and Jobs Act of 2017 created many estate planning changes including the introduction of opportunity zone provisions. These provisions allow people to defer capital gains tax by reinvesting the amount in a qualified opportunity fund (QOF). A QOF is a low-income tract A WOF is an entity created to invest in opportunity zone property and must hold at least 90% of its assets in qualified opportunity zone property (QOZ). QOZ property must satisfy four elements:

Save for Retirement and Pay-Off Your Student Loans

Published on: May 8, 2020 | by Ettinger Law Firm

The average student loan payment, according to credit.com, is $393 a month. That represents almost 20% of the monthly household income after taxes. During your prime working years, you may be tempted to postpone saving for retirement or maxing out your 401K contribution. If you’re on a federal income-based repayment plan, however, saving for retirement while paying off your student loans may actually reduce your monthly student loan payment.

Most federal repayment plans calculate your monthly payment based on your adjusted gross income (your net pay after deductions for taxes). The lower your net income take-home pay, the lower your monthly student loan payment may be. Not all federal repayment plans will result in a lower monthly payment. The eligible repayment plans include:

Revised Pay as You Earn Repayment Plan (REPAYE)

Children and Estate Plans: Equality Is Not Required

Published on: May 5, 2020 | by Ettinger Law Firm

Children and Estate Plans: Equality Is Not Required

If you do not have an estate, at least one person you know has probably recommended that you create one as soon as possible. Among the various questions that the creation of an estate plan presents is how exactly to divide assets. While you likely want to help your loved ones have an easier time in case something happens to you, it can be challenging to determine how to achieve these goals.

While you might have considered passing assets to the children that need it most, you might have quickly dismissed this thought because passing on your assets in an unequal amount might seem unfair. In reality, passing on your assets to your children in equal amounts is not necessary. This article reviews some of the most common situations where unequal distributions might be the best choice to make.

How Much Do You Think You Need for Retirement?

Published on: May 5, 2020 | by Ettinger Law Firm

In 2019, the U.S. Census Bureau, determined that the average national retirement age was between 63 and 64 for men and 62 for women. Most Americans agree that in retirement they’ll need saving to supplement Social Security benefits. Social Security alone will not get them through retirement. The current life expectancy for Americans is 78.93.

Social Security benefits accounts for close to 40% of your pre-retirement income. The average Social Security monthly benefit in 2018 was $1,409.91 a month, or about $16,919 a year. You will need savings to cover the other 60% through a combination of cash, 401k, and other retirement accounts for income. Schwab conducted a survey of its 401k plan participants and found that the participants themselves calculated they’ll need savings of $1.7 million on average to get through retirement.

To figure out how much money you’ll need to support yourself in retirement consider the following:

Growing with Your Estate Plan: How Things Change As You Age

Published on: May 2, 2020 | by Ettinger Law Firm

One of the most difficult parts about successful estate planning is that countless myths persist about how to plan for your future. One of these misconceptions is that young people do not need estate plans. Another common misconception is that once you create an estate plan, there is no need to revise. In reality, the best approach is to create an estate plan early on in life and then to revise or add to that estate plan as time passes. This is because, like or not, emergencies do happen and everyone can benefit from the existence of an estate plan. As a result, this article reviews what a good estate plan should include for some various ages as well as the risks presented to estate plans during each phase of a person’s life.

# 1 – College Age

While you still need one, during this phase of life your estate plan can remain relatively simple and include only critical documents like durable powers of attorney and a will. Each year, countless young people end up in tragic accidents that force their parents or loved ones to make caregiving decisions. Having a power of attorney in place helps to avoid uncertainties about how healthcare or financial decisions for you will be made. Regardless of value, if you have any assets, you should also address how these belongings will be transferred in a will.

About 40 Million Americans to Experience a Drop to their FICO Score

Published on: May 2, 2020 | by Ettinger Law Firm

Millions of Americans are expected to experience a drop in their FICO score when the Fair Isaac Corporation, the company that invented the FICO score, modifies the methodology they use to determine a consumer’s FICO score. Beginning in the summer of 2020, lenders may opt to use the new methodology when assessing the creditworthiness of a consumer when extending credit and setting interest rates on mortgages and consumer loans, such as credit card or automobile loans.

Link between consumer behavior and your FICO score

Consumers with fair credit, growing debt, who take out personal loans to consolidate debt, or who are about to max out their credit cards are expected to see a negative impact to their FICO credit score. The Fair Isaac Corporation updates its scoring model every few years. The last time significant changes were implemented was in 2014, where it was thought that credit restrictions were lessoned. For individuals with little to no credit, utility payment histories, rental payment histories, and the elimination of civil judgments from individual’s credit histories, helped bolster their credit score.

5 Critical Reminders about Inheritance Tax

Published on: April 30, 2020 | by Ettinger Law Firm

The estate tax in the United States is a tax placed on a person’s assets that transferred to beneficiaries after that person’s death. While only a certain category of assets is impacted by these taxes, they can have a profound impact on the administration of your estate plan. As a result, if you plan on engaging in estate planning any time soon, this article reviews some critical factors that you should consider the role of estate and gift taxes in the United States as of 2020.

# 1 – The Lifetime Exemption Amount

Estate taxes in this country impact only the highest-earning households in this country. This is because federal tax laws acknowledge a lifetime exemption, which allows you to exempt certain assets from what constitutes a taxable estate. While the amount of this exemption change yearly, in 2020 the lifetime exemption is $11.58 million for each person. This means that the exemption for married couples is $23.16 million. Any amount that goes over these thresholds is subject to an inheritance tax.

Advances in Reproductive Technology Lead to Estate Planning Obstacles

Published on: April 28, 2020 | by Ettinger Law Firm

Under the Uniform Parentage Act as well as New York law, children born through the aid of advanced reproductive technology are treated the same as biological children.

Children who are born through the use of frozen biological material, however, create many estate planning questions, which include how to write estate planning documents and how to structure trusts.

Know What Federal and New York Law States