Estate Planning

Estate Taxes & New York Legend Ed Koch

Published on: March 19, 2013 | by Ettinger Law Firm

One of the biggest names and personalities in recent New York City history passed away in early February: Ed Koch. Koch has a wide-ranging career, most notable for his three terms as New York City mayor. The mayor emeritus apparently died with healthy bank accounts, as a recent Forbes article suggests that his estate is valued at about $10 million. Apparently most of the wealth was accumulated after he left office in the late 1980s. A high-profile name, Koch made money giving speeches, writing books, appearing and the radio and television.

As usually happens after a celebrity passing, many have asked how Koch’s fortune might be distributed. Court documents recently filed in the matter shed light on how it all might shake out–offering yet another example of the need for community members to be vigilant about their affairs to protect against large tax obligations.

According to reports, Koch left most of his fortune to various relatives along with some charities. He made specific cash distinctions to certain relatives (i.e $500,000 to sister and husband, $100,000 to sister in law, etc.), and left the “residuary estate” (everything remaining after specific gifts) to three nephews.

Family Offers Example of Need for Clear End of Life Planning

Published on: March 15, 2013 | by Ettinger Law Firm

As with all aspects of estate planning, one of the biggest mistakes that families continue to make is assuming that they will “just know” how to handle certain issues when the time comes. That includes figuring out how to divide assets, handle long-term care, and otherwise make complex end-of-life decisions. There is no need to go through any complex legal planning, the thinking goes, because our family is different or our issues are not complex.

Countless feuds, legal battles, and prolonged disputes began with that mindset. The bottom line is that it is never smart to leave any of these issues to chance. The stress and emotion tied into the decisions can make mountains out of molehills and split up even the most tight-knit family. Planning ahead and leaving no room for doubt is not only to ensure that your own wishes are fulfilled but to spare family members the struggle of deciding on their own.

Personal Example

Fighting to Care for the Ailing Zsa Zsa Gabor

Published on: March 11, 2013 | by Ettinger Law Firm

It is often argued that estate planning is necessary to prevent family feuding in the aftermath of a passing. Disagreements about “who gets what,” how to handle funeral issues, and other concerns are known to tear friends and family apart. Being explicit about one’s wishes ahead of time–and letting relatives know early on–is the ideal way to avoid surprises and present the best opportunity for disputes to be squelched.

But proper planning does more than prevent feuding after a passing; it can also prevent it before one’s death. That is because disagreements about caring for aging relatives is often a bone of contention. Arguments about who is going to make decisions on their behalf, what type of long-term care will be pursued, and similar concerns can cause ruined relationships just as much as any inheritance dispute. All of this makes it imperative for local community members to visit with an NY estate planning lawyer early on to ensure legal documentation is in place so that there is no uncertainty about how any of these issues are to be decided. Considering the prevalence of cognitive brain issues (i.e. Alzheimer’s and dementia), prudent planning requires these matters be handled as soon as possible.

Celebrity Example

DOMA Case Update: Amicus Briefs Mount in New York Couple’s Case

Published on: March 7, 2013 | by Ettinger Law Firm

We have frequently discussed the federal law known as the Defense of Marriage Act. Passed in 1996, the law essentially prevents the federal government from recognizing as married same-sex couples who are legally wed in individual states. Of course, New York allows gay couples the right to marry. Under state law, all couples, gay and straight alike, are treated the same. However, while in most cases the federal government defers to state law on legal marriages, that is not so for same-sex couples. To this day they are treated as legal strangers for federal purposes, creating a whole host of complex long-term planning, tax, and government support complications.

New York DOMA Challenge

Over the past few years a few legal challenges have been heard in federal courts arguing that DOMA violates federal constitutional principles. In virtually all of those cases the courts have ruled in favor of the plaintiffs, agreeing that parts of the law are unconstitutional. However, considering the magnitude of the issue, it was almost guaranteed that the decision would ultimately lie with the U.S. Supreme Court.

Understanding How a Wealth Transfer Might Affect Insurance

Published on: February 27, 2013 | by Ettinger Law Firm

Advisor One shared a useful story this week that touches on an item commonly forgotten in wealth transfers, including those using trusts or other legal tools. It is critical to remember how insurance coverage might be affected by the transfer. That way, changes can be made immediately to guarantee that coverage is in good standing at all times. Sadly, as you might expect, this error is often only uncovered after some catastrophic accident, when insurance coverage is needed. The last thing anyone wants is that “oops” moment, when it is discovered that the coverage does not exist because of the previous transfer via trust or other tool (like an LLC).

The Basic Problem

Insurance policies are written to provide coverage to an owner or titleholder. This is the case for virtually all types of coverage, from home, automobile, and boats to collectibles. Problems arise, however, when a transfer is made and the insurance policy is not updated to reflect the change. For example, if a home is transferred into a trust, it is important to confirm that the proper changes are made so that the homeowners policy covers the new arrangement.

Can You Reject an Inheritance You Don’t Want?

Published on: February 22, 2013 | by Ettinger Law Firm

Communication is absolutely essential to quality estate planning. That includes both sharing of information between client and planner, as well as the client being open and honest with their family about their wishes. Some might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out only after they are gone. But this opens up the door to potential feuding and costly legal challenge. The goal of proper planning is to make transfers as seamless and efficient as possible, and meeting that goal requires others to know what to expect when the time comes.

Most of the time, unwelcome inheritance surprises come in the form of not getting what you expected to receive. Many adult children are surprised when a parent leaves assets to someone else or does not distribute equally between siblings. But the opposite may also be true. You may receive an item that you do not want. For a variety of reasons, not all gifts may be welcome. There are steps that can be taken to disclaim a gift that is part of an inheritance but they are often confusing.

Thanks, But No Thanks

Dying Intestate–The Documents that Later Emerge

Published on: February 15, 2013 | by Ettinger Law Firm

If you pass away without a will designating how you’d like your affairs to be handled, you are deemed to have died “intestate.” Some of the most significant legal battles and family feuding occurs in those situation because it is essentially a free-for-all. Generic legal rules apply, but without any indication of how to handle property distribution and other matters, all interested parties may decide to pursue different legal avenues to maximize their own interests. Legal fights can still occur when a will exists (often referred to a “will contests”), but the possibility of one’s wishes being completely upended are far lower when at least some documentation exists.

Interestingly, it is not uncommon for various documents purporting to explain one’s wishes to pop up later on–in the midst of a legal dispute. For obvious reasons, these documents should be examined with much scrutiny, but they still may influence a legal case.

New Document in Lottery Winner’s Estate Feud

Estate Battles More Common Than Ever

Published on: February 13, 2013 | by Ettinger Law Firm

Feuding after a death has been common for centuries. However, observers point out that in recent years estate battles have actually grown and more frequent. The trend is noted for all families, both those with sizeable wealth and those of much smaller estates. It is a crucial reminder for residents to take action now to eliminate uncertainty and confusion and ensure in-fighting doesn’t tear a family apart following a passing.

Last week the Telegraph published a story on the topic, pointing to data showing an uptick in legal battles over inheritance disputes. The most common explanation for the change is the recession which devastated many families over the past seven to eight years. One observer explained that in tough economic times, “more people are hoping to receive an inheritance and there can be a great deal of trouble if their hopes are disappointed. People are more litigious in general and more willing to assert their rights.”

Undoubtedly, the recession acted as a spur, influencing some to start a legal fight in order to secure funds that they desperately needed and might assume are owed to them. However, money troubles aren’t the only cause in the change. After all, financial incentives exist even in relatively prosperous times.

E-Planning: Estate Planning in our Digital World

Published on: February 6, 2013 | by Ettinger Law Firm

Like it or not, our world is infatuated with technology. Smartphones conduct intercontinental transactions. Friends across the country communicate through instantaneous text messaging, and telephones and tablets close distances and miles through face to face conversations. Because technology plays such an important role in our daily lives, today’s estate planning should include an arrangement for organizing and protecting technological and digital assets.

Dividing Up Digital Assets

We have frequently discussed how there are different kinds of digital assets to think about when drafting your estate plan. First, there are your personal digital assets, which would include any email accounts, personal social media accounts and maybe even a personal web site or personal blog. Personal digital assets might also include any photos or documents stored on different websites, like Snapfish, Shutterfly or Dropbox. Information stored in any cloud storage should also be considered personal digital assets.

Estate Planning with the Blended Family in Mind

Published on: February 4, 2013 | by Ettinger Law Firm

The birth of a child, a soldier’s welcome home, a wedding, a graduation, holiday festivities, or even a birthday party are all examples of gatherings where, more often than not, a blended family is present, taking part and celebrating. In the U.S., first marriages, second marriages and remarriages regularly welcome new family members. Plus, people are generally living longer, often outliving spouses and marrying again. Step children, step parents, children from previous marriages are all members of the different types of blended families that now outnumber “traditional” families in the United States. And if you are a member of a blended family, as it grows and changes, new estate planning considerations arise regarding your own children and family members, as well as members of your blended family.

Avoiding Possible Problems

Often, in many family situations, one of the best ways to avoid potential problems is to talk with family members about your concerns. As a recent USA Today article discusses, communication is critical in estate planning, particularly when a blended family is involved. Frequently when a family member passes, the remaining family members aren’t just concerned with the transfer of money, they are also concerned with the transfer of special heirlooms and other unique items. Talking about, and planning for the future transfer of not just monetary assets but personal assets as well will hopefully avoid potential problems and disagreements.