Estate Planning

College Savings Plans and Estate Planning

Published on: January 27, 2018 | by Ettinger Law Firm

We have recently written about various estate planning mechanisms that can enable you to pay for a young person’s college tuition. If you are interested in making those types of arrangements, it is important to understand how they might affect your estate plan. A college savings plan could become an important part of your comprehensive estate planning strategy.

The Basics

College savings plans, or 529 plans, come in a variety of shapes. There are many characteristics that you need to consider when determining the plan that is right for you. One of the most popular 529 plans is the prepaid tuition plan. With this type of plan, you make cash contributions to an account that invests that money and gains interest over the life of the account. The earnings the account makes are tax-free so long as they are used for qualifying expenses related to higher education.

Loans to Family Members Can Affect Your Estate

Published on: January 25, 2018 | by Ettinger Law Firm

Most people want to help their family members have everything they need. In fact, one of the main reasons to create a comprehensive estate plan is to make sure that you are able to distribute your assets in a way that provides the most security for your beneficiaries. During our lives, there are times when we have family members in need and may be in a position to help them. If we choose to do so with a loan, it is important that the details of that loan are written down and thoroughly understood by all parties involved in the transaction. Otherwise, there could be potential problems when it comes to administering your estate.

Pitfalls of Loans

One of the biggest problems with loans happens when the lender passes away, often unexpectedly. If there is an outstanding loan to a friend or family member, especially one that may also be a beneficiary, there is likely to be some disagreement over the terms of various documents within the estate plan.

The Role of a Second-to-Die Life Insurance Policy

Published on: January 22, 2018 | by Ettinger Law Firm

There are many different assets that combine to form your overall estate, and there are many different options when it comes to protecting those assets. Your estate can include real estate, stocks, copyrights, bonds, vehicles, and many other types of property. Your estate value also includes the cash you have on hand. In today’s world, it is not uncommon for high-value estates to be low on cash. While the estate itself may be worth a great deal because of many of the holdings within the estate, there is often a lack of ready cash to take care of important expenses like funeral costs or even state and/or federal estate taxes. If you find yourself in that position, a second-to-die life insurance policy could be an important part of your estate planning toolkit.

Benefits

A second-to-die life insurance policy has many benefits for many different types of families. However, they can be especially useful in situations where there is a large estate involved. With new legislation, the federal estate tax exemption has doubled and a lot more people do not have to worry about owing the estate tax as the exemption for an individual has been raised to around $11 million and for a couple to around $22 million. The exemption for New York’s state-level estate tax is currently at $5,250,000. Only estates valued over these amounts will be subject to the estate tax.

The Importance of Domicile on Estate Planning: Avoiding Double Taxation

Published on: January 18, 2018 | by Ettinger Law Firm

Unfortunately, the old adage that death and taxes are unavoidable is true. Unfortunately, they are also both closely related. For individuals with estates that are subject to a federal and/or a state-level estate tax, there exists the possibility of being double taxed if you maintain a residence in more than one state. Unfortunately, this is all-too-common of an occurrence. A comprehensive approach to estate planning can help avoid this unpleasant surprise.

How It Happens

Double taxation typically occurs in situations where individuals have multiple properties spread across different states. It is not uncommon for an individual to have a home in New York and another home in, say, Florida. Potentially, the second home could be even closer – like Pennsylvania. Wherever your multiple residences are, you need to be aware of the potential tax consequences of maintaining property in various states.

Increased Medicare B Costs May Consume More of Social Security Adjustments

Published on: November 15, 2017 | by Ettinger Law Firm

Millions of senior citizens will soon find out just how high their Medicare Part B premiums will be in 2018 and whether or not their cost of living increases from Social Security will be able to help offset those adjustments. Unfortunately, many low income seniors may be due for some especially bad news as the board of trustees of Medicare are likely to ask for a premium increase consistent with the expected cost of living adjustment from Social Security, leaving may struggling to better their current situation.

According to reports, the Social Security Administration is poised to increase monthly benefits by 2.2 percent, a raise from an average monthly allowance from $1,360 to $1,390. Although the increase is not dramatic, it is much higher than the miniscule 0.3 cost of living adjustment given last year. Those cost of living increases from the Social Security Administration are important because they have a direct impact on whether or not Medicare can increase premiums.

Under the law, Medicare’s board of trustees cannot allow any premium increases that would effectively decrease the amount of benefits individuals would receive from Social Security. While seniors did not see any increases in their Medicare Part B premiums over the past few years, this was because there was no corresponding increase in Social Security benefits.

Estate Planning for Young Families

Published on: November 13, 2017 | by Ettinger Law Firm

Starting a family is one of the most exciting times in our lives. With marriage and children comes responsibility to plan for our futures and ensure our loved ones are taken care of in the event of tragedy. While many young families may feel as though they can put off planning their estate, the truth is that it is never too early to start or too late to revise.

One of the first things new families will need to consider is appointing guardianship for children in the event both parents pass away. Although it is difficult to think about, children need to be entrusted to a reliable person to raise them to adulthood. The difficulty often lies in both parents coming to agreement on who should raise the children in a scenario like this.

Another important step is naming an executor to your estate to ensure your children receive all that is due to them should both you and your spouse pass away. Choosing who will manage your estate can have a tremendous impact on the situation and should be someone trustworthy and willing to go the distance until the children are grown and able to take responsibility.

The Importance of Digital Assets in Estate Plans

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

Laws that address how a person’s estate should be divided after their death were created at a time when no one had anticipated the onset of the electronic era. Today, however, there are many important elements of a person’s life that involve digital files. Some of the most common examples include electronic bills that are not printed in paper form and profiles created through social media accounts that contain personal information.

It is critical that individuals who have important information that exists in digital form take proper steps to prepare their account in case of their unexpected demise. If these preparatory steps are not taken, individuals are at risk of having their assets or estate being divided in a manner that they might not have desires. This article will review some of the most crucial tips that should be followed during estate planning by individuals with digital assets.

Tip #1 – Adequately Record Account Names and Passwords

Common Myths About Estate Planning

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

A large number of individuals are confused about some of the complicated issues involved in estate planning. It is critical, however, that individuals understand all of the details about estate planning. Failure to properly understand the estate planning process can result in individuals facing some substantial difficulties including improper administration of assets.

Myth 1 – A Last Will and Testament Avoid Probate

In actuality, in the state of Florida, even if a person writes a Will and Last Testament, the individual is still required to make sure that a decedent’s assets are passed to the proper heirs and beneficiaries.

Three Estate Planning Tips for Blended Families

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

More and more often, families include less traditional definitions than they once did. Remarriages are more common, and cohabitation in lieu of marriage is also more common. In other words, blended families are increasingly common in our society today. If you are considering remarriage or have already remarried, it is extremely important to think about estate planning for your new marriage and how to either approach it from the beginning or revisit an estate plan that may already be in place. The following tips could prove useful for blended families exploring the estate planning process and may help you figure out where to begin your estate planning discussion with an experienced estate planning attorney.

Consider a Prenuptial or Postnuptial Agreement

A prenuptial agreement is an agreement that you enter into with your perspective spouse before the two of you get married. It sets out terms that dictate the property and financial rights of the spouses in case of divorce. They can also be used to set forth terms of asset distribution and other important aspects of estate planning. By specifying these terms, you can help your loved ones avoid conflict between members of your blended family while ensuring that your wishes for your assets are carried out. A postnuptial agreement can accomplish many of the same goals but is entered into after you have already gotten married.

Understanding Holographic Wills

Published on: November 1, 2017 | by Ettinger Law Firm

The internet provides us with a wealth of information at our fingertips. Unfortunately, some less scrupulous websites take advantage of the trust many people put into the internet and provide less than sound legal advice on important issues – like creating a Will and/or a trust. Sometimes, people mistakenly believe the advice they find on the internet, which can be wholly incorrect or only applicable in certain jurisdictions. One problem many individuals come up against is believing that they have a valid Last Will and Testament but what they really have is known as a holographic will.

What is a holographic will?

Basically, a holographic will is a will that has been entirely handwritten and then signed by the testator. Typically, such wills do not have witness signatures. For any Will to be valid, it must comply with the statutes governing trusts and estates in the respective state that the Will is being created and/or administered in. Sometimes, a state will allow a Will to be administered if it was created in another state and would have otherwise been valid in the state where it was created even if it contradicts the administering state’s laws. For the most part, holographic wills are invalid in most states.