Elder Law

Treasury Department Announces End to myRA Retirement Savings Accounts

Published on: August 26, 2017 | by Ettinger Law Firm

Saving for retirement just became more difficult for thousands of Americans relying on the Treasury Department’s myRa retirement savings account as the agency recently announced it would wind down the program. In a statement released on the Treasury Department’s website, the agency said the $70 million in costs since 2014 became too costly to the taxpayer and could no longer justify the program’s expense.

“The myRA program was created to help low to middle income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program. Fortunately, ample private sector solutions exist, which resulted in less appeal for myRA. We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities,” said Jovita Carranza, U.S. Treasurer.

The myRA program functioned as a Roth IRA account with no fees, minimum balance, and non-deductable to help middle and lower income Americans without access to employer sponsored retirement plans like a 401(k) plan and save for their retirement. Participants under 50-years old could contribute up to $5,000 to their account every year while those 50 years and older could contribute up to $6,500.

How are Taxes Calculated for Inherited Property?

Published on: August 17, 2017 | by Ettinger Law Firm

When people learn they are going to be the beneficiaries of someone’s estate and will inherit property, many of them often wonder whether it will actually cost them money to do so. We often hear about raising or lowering the federal and state estate tax, sometimes referred to as “the death tax” and all this talk can be quite confusing. While every situation is different and the tax code itself is quite complicated, there are a few basic principles beneficiaries should be able to rely on.

To start, New York is one of only a handful of states with a state inheritance tax but there are exceptions to the rule and that amount has increased substantially over the past few years. As of April 2017, the exemption on inheritance tax in New York is $5.25 million, meaning beneficiaries will only be taxed for assets worth more than this amount. The tax rate for inherited assets above $5.25 million is five to 16 percent, much lower than the federal inheritance tax rate of 40 percent.

Unlike other states with inheritance taxes, New York has a “tax cliff,” meaning if your inherited assets are greater than the tax exemption then the entire value of the asset is taxed. By contrast, other states with inheritance taxes only tax at the value above the exemption threshold. New York is one of the only states to institute its inheritance tax rate this way and although this may seem steep, the current tax rates are much more fair than they used to be.

What are the Rules for Appointing an Executor in New York?

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

Estate planning is something everyone, regardless of age or wealth, should take care of in order disperse assets and have final instructions carried out. Whether that plan be a last will and testament or a trust, folks need to create a plan early on in life and update their estate planning as life events like marriage, buying a home, or acquiring wealth. One of the most common ways for folks to settle their affairs is to create a last will and testament and name an executor to oversee the will in probate.

Often times, executors to estates are close family or friends to the testator, the person crafting the will. The executor will bring the will through probate court, taking stock of all the deceased’s assets and debts and ensuring creditors are paid and the assets are dispersed to the proper beneficiaries, which may also include the executor.

However, New York does place certain very limited restrictions on who may serve as an executor to an estate. Under N.Y. Surr. Ct. Proc. Act § § 103, 707, the basic rules for serving as an executor of an estate are:

Planning Ahead with your Estate to Avoid Medicaid Estate Recovery

Published on: August 3, 2017 | by Ettinger Law Firm

Medicaid provides valuable health care coverage to millions of low-income adults, children, women carrying children, persons with disabilities, and the elderly. The program is jointly funded by states and the federal government and is administered by the states. For many seniors, Medicaid provides them with the life-saving nursing home and in-home nursing care they need to live comfortable, dignified lives.

However, not all services provided by Medicaid are completely free and recipients sometimes need to pay back the state and federal governments for certain types of services rendered, particularly nursing home or home care aid. In fact, the state may go so far as to try and recover assets from a deceased’s estate if he or she received nursing home or home health care after the age of 55.

Under 18 NYCRR Section 360 -7.11, the state of New York can attempt to recover up to 10-years worth of Medicaid services provided before the deceased’s passing if the individual received nursing home care, had been deemed a “permanently institutionalized individual, and owned a home. However, it is important to know if the deceased left behind a surviving spouse, child under 21-years old, or an adult child deemed permanently blind or disabled then Medicaid cannot place a lien on the home.

What are the Time Deadlines to Contest a Will in New York?

Published on: July 25, 2017 | by Ettinger Law Firm

In New York, there is no set time deadline to contest an estate. Rather, heirs, beneficiaries, and other interested parties will receive notice from the court the executor of the estate intends to enter the last will and testament into probate. However, there are certain deadlines for challenging other aspects of the will, including the accounts of the estate and allegations of theft by the executor.

Before the estate can be divided amongst the beneficiaries, a New York Surrogate Court must accept the last will and testament and enter the estate into probate. After the testator passes away, the surviving spouse and children are informed of the individuals passing, regardless of whether the will mentions these persons.

Next, the executor of the estate will need to ask each of the deceased’s heirs to sign a waiver allowing the estate to enter into probate. Often times, this is not an issue since heirs are often named as beneficiaries to the estate and were hopefully in good standing with the testator before his or her passing.

Conditional Bequests and Devisements

Published on: July 21, 2017 | by Ettinger Law Firm

The law generally gives benefactors great leeway to set conditions for beneficiaries to inherit assets from an estate or trust. This is because the benefactor has every right to disperse his or her assets while beneficiaries have no such right. Often called “dead hand control,” these conditions are often meant to promote a certain type of lifestyle or at the very least prevent beneficiaries from harming themselves with the wealth passed on.

When conditional bequests and devisements are attached to a last will and testament, probate courts rarely concern themselves with whether the conditions are fair to heirs or even wise to try and implement. Rather, probate courts function to ensure proper transfer of assets and that the deceased’s wishes are carried out.

Some situations where benefactors may attempt to impose certain conditions for inheritance can include requiring an alcoholic seeking treatment, children and grandchildren holding down steady jobs, or even finishing school before collecting inheritance. Unfortunately, theses of demands rarely work out beneficiaries sometimes would rather choose to follow their free will than comply with demands of morality or industriousness.

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.

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.

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

Elder Law Estate Planning – Choosing the Right Trust for your Estate

Published on: June 16, 2017 | by Ettinger Law Firm

When deciding how to disburse assets in an estate, many individuals decide to create a trust over a last will and testament in order avoid probate court and create a public record of the events. The pros and cons of establishing a trust over a will depend on many circumstances, including what type of trust the grantor chooses to create and what types of assets fall into that particular trust.

Living trusts

One category of trusts is the inter vivos trust, created while the individual is still alive. Two main types of inter vivos trusts exist, revocable and irrevocable trusts. Revocable trusts allow the grantor modify, amend, or otherwise change any aspect of the trust as he or she sees fit.