Estate Planning

Navigating Challenges Associated with Death Taxes

Published on: May 5, 2022 | by Ettinger Law Firm

Since 2021, many conversations have been had about the Build Back Better Act, which saw several substantial tax increases. While some people have described the Act as dead, the future of the act remains uncertain.

Despite what happens to the act, its contents are subjects to which Congress is likely to respond in regards to what is referred to as “death taxes”.

A “death tax” is a type of “transfer tax” and is referred to as an estate tax. Most people are acquainted with income tax. If an individual receives a salary, the salary is taxed. If a person sells a property that has appreciated, the gain also receives what is referred to as a capital gains tax. Ordinary income tax, as well as capital gains tax, are two types of income tax.

Advice on Reviewing Family Legacy Plans

Published on: May 5, 2022 | by Ettinger Law Firm

Passing assets through generations can be a nuanced process. Assets are routinely an emotionally difficult issue, and a loved one’s plans for transferring assets can trigger various reactions from those left behind.

Data shows that by at least 2045, almost $75 trillion in assets will be transferred to heirs while charities will receive an additional $12 trillion. The size of many transfers between generations exaggerates why families should create as well as discuss comprehensive legacy plans.

Our lawyers routinely work with clients to create a detailed multi-generational plan where family members join together in a neutral and safe space for the person facing the end of life or incapacity to discuss their financial as well as non-financial goals with younger generations. This article reviews some helpful advice families should follow who want to have successful family legacy plans.

Advice on Succession Planning in 2022

Published on: May 5, 2022 | by Ettinger Law Firm

The stock market over the last ten years has increased the valuation of many retirement accounts. Consequently, many people interested in estate planning are focused less on internal growth necessary for succession planning than at other times.

Inflation is much like gravity. Both rise and fall. With inflation occurring at substantial levels during the war in Ukraine, people interested in making the most of their estate plans should recognize that their plans ultimately might require a proactive effort. This article reviews some important details that you should consider when creating a strong succession plan.

Focus on Your Goal

Estate Planning Advice After Middle-Aged Divorces

Published on: May 5, 2022 | by Ettinger Law Firm

In the last few decades, the rate of divorce among middle-aged as well as older people in this country has risen. Studies of the issue have discovered that in recent history, the divorce rate for people over the age of 43 in the country has substantially increased. This increase in divorce is even more noticeable when focused exclusively on “gray divorce”, which involves people between the ages of 55 to 64.

Regardless of what caused this increase, the increase in the number of these divorces has raised some special considerations that should be analyzed concerning divorces. This article touches on just a few of those considerations.

Spousal Support

Issues that Could Invalidate a Will

Published on: May 5, 2022 | by Ettinger Law Firm

When considering whether to dispute a person’s will, you should review what factors exist that might suggest a successful basis for challenging the will. While these are an almost unlimited number of factors that exist, some particularly common issues arise concerning wills and resulting challenges.

# 1 – Last-Minute Changes

One of the most commonly encountered situations is when a deceased person executed a will close to the end of life that substantially alters their estate plans. When a will is drafted, an individual who wants to challenge the document should inspect several things to decide whether the document is valid. For estate planning documents created near the end of a person’s life, a detailed analysis should be made regarding whether the person had the adequate mental capacity to execute the document.

What to Know About New York’s Estate Tax Cliff

Published on: April 18, 2022 | by Ettinger Law Firm

New York’s estate tax cliff can lead to heirs in the state paying estate tax at a rate that surpasses 100%. The existing per-person New York state estate tax exemption is $6.11 million. This is the amount that a person can pass on to heirs at his or her time of death without being obligated to pay New York state estate taxes.

Provided a person’s taxable estate falls into the “Estate tax cliff range”, which occurs between $6.11 million and $6.711 million in 2022, a person falls off the estate tax cliff in New York state, and the amount surpassing the exemption is taxed at a rate greater than 100%. Fortunately, various solutions exist to this challenging situation.

Utilizing Charitable Bequests

Start-Up Poised to Make Estate Planning Accessible to Everyone

Published on: April 18, 2022 | by Ettinger Law Firm

The estate planning start-up, Wealth, is pursuing a $180 billion U.S. market by utilizing a digital dashboard that updates holdings in real-time. Many technology companies have offered potential approaches to solving these issues ranging from WillMaker to EverPlans. The CEO of Wealth has stated that he believes his company is pursuing a more unique strategy by appealing to workers that want to offer more value-added benefits.

The Company’s Founding

The company was founded by the former CEO of the company Emailage, which has since been acquired by LexisNexis. The assets from such a sale allow individuals to create, manage, and visualize estate plans through a detailed ecosystem of proprietary legal documents as well as third-party APIs.

What You Need to Know about Living Trusts

Published on: April 18, 2022 | by Ettinger Law Firm

If you’re creating a plan for what will happen to your estate after you pass away or become incapacitated, you’ve likely familiar with the advantages you can realize by creating a living trust. Items positioned in a trust do not pass through probate, which can be a costly and time-intensive process. Living trusts (also referred to as revocable trusts) let a person appoints a trust administrator to look after an estate after the creator passes away.

Living trusts often simplify how assets in estates are passed on. Unfortunately, countless opportunities exist to make errors, especially if you’re tasked with transferring items to a trust. Certain kinds of accounts should never pass into a trust. These certain accounts should not pass into a trust even in situations where they represent the majority of an estate. This category includes retirement accounts like 401(k) plans as well as other types of retirement accounts.

If you pass on assets to a trust, the Internal Revenue Service will classify the interaction as a distribution and you will be required to pay income taxes.

How to Avoid Disagreements with Trustees

Published on: April 10, 2022 | by Ettinger Law Firm

In the recent case of MBM Family Trust, one party initiated legal action against another concerning a foreign judgment. The party who initiated the lawsuit later added a trustee of a trust that the plaintiff claimed helped the defendant conceal assets. The trustee pursued a special appearance and argued over personal jurisdiction.

Ultimately, the trial court did not accept this object. Instead, the trustee appealed. On appeal, the court found that claims intended to recover assets from a trust can only be brought against the trustee who is the trust’s legal representative.

The appellate court commented that the trial court had evidence that the family trust was a lender and that the trustee stepped in to function as the lender of a home equity line. The home equity line of credit provided the line of credit was secured by a deed of trust to the trustee and apart from the home equity line.

A Quick Guide to Reverse Estate Planning

Published on: April 10, 2022 | by Ettinger Law Firm

Estate planning relies on a countless number of assumptions. One assumption is that assets only flow in one direction: from older person to younger person. In reality, this does not always have to be the case. By making the most of some unconventional estate planning techniques, people can realize some tax and estate planning advantages. This is where the concept, of “reverse estate planning” comes in.

Some adult children who have more assets than parents and can help take care of the older generation. In these cases, reverse estate planning can play a valuable role. This is particularly true when parents will not be able to use the entirety of their estate and gift tax exemptions. This is just as true if a parent is in a lower tax bracket than their child.

Tax Advantages through Reverse Estate Planning