New York Estate Planning & Elder Law Blog

Settling Trust Debts Before Distributing Assets

Published on: July 14, 2017 | by Ettinger Law Firm

Creating a living trust is an excellent way to avoid having assets pass through probate courts and create showdowns for potentially messy challenges brought by individuals claiming to be “interested parties” to the estate. However, even living trusts must still settle up on certain types of debts incurred against the estate by the deceased. If you or a close friend or family member are named as a trustee, you should take some time to understand the estate laws governing these and other estate concerns.

First, it is important to know that not all debts expire upon the passing of the trust’s creator. For example, federal student loans are discharged upon the debtor’s passing but private student loans may not be vacated. Furthermore, debts held by two or more persons may not be discharged and the surviving debtor may carry the remainder of the responsibility.

Second, unlike estates handled by a last will and testament, public notices to creditors are not posted in the media. Again, this is because the estate does not pass through probate court. Instead, the trustee will need to contact known creditors and inform these entities of the trust maker’s passing. By informing known creditors right away, these entities only have a limited time to recover debts from the estate and the debt may be discharged should these creditors fail to act in a timely manner.

Estate Planning for Incapacity

Published on: July 11, 2017 | by Ettinger Law Firm

Growing older and the inevitability of death are unpleasant topics for most people. Often equally unpleasant is the thought of being alive but being unable to make important decisions for yourself. Part of a comprehensive and effective estate planning strategy includes ensuring that you have planned for the possibility of future incapacity. Incapacity typically refers to the inability to make important medical and financial decisions, but proper planning for the possibility of such an occurrence can help make sure that should such circumstances arise, your designee will be adequately prepared to handle them. Failing to plan for incapacity can result in serious financial consequences and may inhibit your ability to distribute your assets as you see fit.

Perhaps the most important part of ensuring that you have adequately planned for the possibility of incapacity is working with an experienced estate planning attorney to make sure all of your estate planning documents accurately reflect your wishes for them. An estate planning attorney can review your estate plan for accuracy as well as for compliance with the law, and can ensure that any steps you have taken to plan for incapacity will fulfill your goals. The following suggestions can help you plan for the possibility of incapacity and avoid the pitfalls that come from being unprepared.

Power of Attorney

What you Need to Know About New York Estate Taxes

Published on: July 11, 2017 | by Ettinger Law Firm

While many believe estate taxes only hamper the financial activity of very wealthy people, the truth is even middle class individuals can be subject to the burdens of state and federal estate taxes. For example, if you spent your whole life building a small business, the value of that asset can exceed the estate tax threshold easily by virtue of the real estate’s value alone.

For many years, New York’s estate tax lagged behind the federal threshold. Currently, the federal estate tax threshold is $5.49 million while New York’s state exemption is $5.25 million. New York’s inheritance tax exemption will continue to climb until 2019, at which point the amount will match whatever the federal threshold becomes. The change came about thanks to legislation signed by Gov. Andrew Cuomo in March 2014.

One key difference between New York and federal tax laws relates to what is commonly called the “tax cliff.” Under federal and many other state taxation laws, only the amount of the estate exceeding the tax threshold would be subject to tax. For example, if an individual left behind an estate worth $6 million, only the $501,000 exceeding the threshold would be subject to federal income tax.

Avoiding Claims of Undue Influence

Published on: July 9, 2017 | by Ettinger Law Firm

Comprehensive estate planning is a responsible way to protect your assets. One of the primary ways you can utilize estate planning to protect your assets is by ensuring that your estate plan accurately reflects how you wish to have your assets distributed in the event of your death. Taking steps toward preventing individuals from contesting your Will is one way to help make sure that your estate will be distributed according to those wishes. A common approach many people take to contesting a Will is by claiming that the testator – or the person that created the Will – made decisions within the Will because of undue influence. While this claim is not always wholly unavoidable, there are steps that you can take to decrease the chances that such a claim will arise.

Understanding Undue Influence

There is nothing wrong with an individual asking for specific property or even a child encouraging a parent to leave specific things to them instead of their siblings. Courts do not typically view these actions as examples of undue influence, even when an individual is fervent about their desires. However, such requests move closer toward undue influence when the testator is in a compromised position such as being mentally or physically ill. For instance, if the child asking for property is the ailing parent’s caregiver, a court may find that repeated requests for certain assets could qualify as undue influence depending on the other circumstances surrounding the request and individuals involved.

What Benefits Can Elders Qualify for in New York?

Published on: July 7, 2017 | by Ettinger Law Firm

For New Yorkers over 60-years old, state and federal programs provide numerous benefits and community services to help cope with some of the hardships associated with aging. Every county in New York, with the exception of New York City, has a an Office for Aging aimed at helping seniors get vital information on these and other programs. Some of these programs, like Social Security and Medicare, are already well known to most people but others involving tax credits and rent subsidies may be less known and therefore less likely to be applied for.

Elders applying for various benefits should know each program has its own requirements and qualifications applicants will need to refer too. Furthermore, some federal programs may require seniors to “spend down” some of their assets to meet wealth qualifications. Because some federal programs have “look back” periods that can end up imposing penalties on the applicant, seniors are strongly encouraged to consult with an experienced elder law attorney about their situation.

Social Security

Estate Planning and Retiring Abroad

Published on: July 5, 2017 | by Ettinger Law Firm

Most individuals look forward to retirement for many years. The chance to enjoy the hard work you have put forth throughout your lifetime is appealing, and being able to do so without being tied down by work or other responsibilities often sweetens the potential possibilities that await you in retirement. For some people, retiring abroad is one of their life goals. Maybe they visited a place they simply fell in love with or maybe they want to take advantage of more favorable economic situations that can exist for some individuals in other countries. Whatever the reason for desiring a retirement abroad, there are some important estate planning considerations to keep in mind.

Double Taxation

If you remain a United States citizen, you will still be subject to U.S. taxes. That means you need to be aware of the tax policy in any country you might be considering retiring in outside of the United States. If the country you want to retire to will also impose taxes on you, you may end up paying double the taxes on your income and potentially on your assets. This can significantly reduce the size of your estate, in turn hindering your ability to leave as much of your assets as possible to your heirs. While you can renounce your U.S. citizenship, doing so carries a wide range of consequences. It may become more difficult to visit loved ones in the United States, and you may even be subject to the U.S. expatriation tax.

What are My Options for Passing on My Home to My Children?

Published on: July 5, 2017 | by Ettinger Law Firm

As we age, we begin to think more and more about what we can pass on to the next generation and their families. One of the best ways to pass on wealth is to transfer ownership of a home or other real estate. Under the law, individuals utilize one of many different way to accomplish this goal, each with its own set of benefits and drawbacks.

In order to avoid placing your loved ones in an unwanted tax situation, carefully examine your situation and tailor a plan that is right for you and your family. With a little time and effort, you can ensure the transfer of your home and other assets goes as smoothly as possible.

Naming your family as beneficiaries in your will

Tips for Planning End-of-Life Care

Published on: July 2, 2017 | by Ettinger Law Firm

Nobody likes thinking about serious illness, especially a serious illness that could lead to death. Unfortunately, such illnesses can cause massive financial difficulties for friends and loved ones which can in turn significantly deplete the assets you had been planning to leave to your heirs. The moral of the story is that, no matter your age, it is never too early to start planning for the potential need for end-of-life care. The following tips are adapted from a recent article on this topic found in USA Today, and they may provide you with some important concepts to consider when thinking about healthcare issues.

Be Explicit About Your Wishes

Telling people in passing how you hope to be cared for in case of serious illness is important, but it isn’t necessarily always enough. It is important to write down your wishes and be explicit about how you wish your health care to be handled. You should also work with your estate planning attorney to create documents such as health care proxy nominations and/or a living will that express your healthcare wishes in detail.

Estate Planning When You Do Not Have Children

Published on: June 30, 2017 | by Ettinger Law Firm

While comprehensive estate planning can certainly be a difficult process, there are some things that remain rather constant. Most parents will choose to leave the bulk of their estate to their surviving spouse and/or their children, with the surviving spouse typically leaving the remainder of the estate to children. However, it is not uncommon for individuals thinking about retirement and other aspects of estate planning to not have children and/or not be married. When those situations arise, many of those individuals find it challenging to determine how they would like to distribute their estate and to decide whom they should nominate to make important decisions. An experienced estate planning attorney can help you understand the myriad options available to you, and a recent article from CNBC can help you start exploring your options.

Shaping Your Will

According to the article, a 2016 survey indicated that 64 percent of Americans do not have a Will in place. While the survey did not focus on childless adults, it is safe to say that many of those individuals do not have a Will in place, either. When you die without leaving a Will, your state has a statute that determines to whom your estate will be distributed.

Choosing the Right Beneficiaries

Published on: June 28, 2017 | by Ettinger Law Firm

Typically, many people tend to think an estate plan only includes your Will. In today’s day and age, however, most people have a much more diversified estate plan than they realize. Your estate plan is far more than just your Will and includes things like trusts, investments, retirement accounts, and insurance policies. One of the challenges of comprehensive estate planning can be understanding how these assets work and to whom they should go to. Recently, Forbes explored the way several assets within a typical estate plan usually work and understanding this could be an important part of your estate planning decisions.

Wills and Trusts

Those selected to benefit from assets distributed through a Will may have to wait a little longer than if you were to use a trust or other vehicle to distribute such assets. Wills are required to go through the probate process to prove that they are valid and to make sure they comply with the law. Typically, assets within a Will cannot be touched until the probate process is complete. While the probate process in New York is easier than elsewhere, it can still be time-consuming especially for an individual that may need immediate access to the assets in your Will.