Articles Posted in Estate Planning

One of the more unique estate planning feuds in recent memory remains under investigation, three years following the death of the family matriarch that started the debacle. While few families descend into physical violence, our New York estate planning lawyers appreciate that this case is a stark reminder of the mix of extreme emotions often present in these cases.

According to a Seacoast Online report, when Eugenia Boies died in 2009 at the age of 96 she left a family fortune valued at $12 million. The estate had mostly passed to her when her longtime husband passed away in 2007. The family wealth originated on the husband’s side of the family, dating as far back as a Civil-War era gunpowder company. The wealth included over a million dollars in the bank, real estate in North Hampton, and millions in stocks.

Before her death Eugenia named her nephew, Peter, as one of three executors of her estate. Shortly after Eugenia passing, while the probate process was underway, Peter and his wife were awoken in the middle of the middle to a drive by shooting, with dozens of high-caliber bullets shot into the family’s bedroom. The family home was riddled, but fortunately the couple survived the ordeal.

Our New York estate planning attorneys frequently remind residents that it is important to update an estate plan following major life changes, such as a divorce or marriage. However, that basic advice may be misleading, because in some cases it is crucial to consider updating the plan before the major life event takes place. That may be especially true in the case of second marriages.

A recent Elder Law Answers article summarized a few points to consider at this time:

-Make sure both spouses are on equal footing. Secrecy at this time is toxic. Both partners should take an inventory and understand what assets and debts are on the table. All planning extends from that base.

Taxes undoubtedly play a determinant role in New York estate planning. Understanding how assets can be transferred and passed on while incurring the lowest tax burden is crucial. Yet, it is a drastic oversimplification to assume that planning involves only looking at taxes. The “human” element is often even more important. Each New York estate planning lawyer at our firm understand that creating the best possible plan for each family requires an understanding of the unique family dynamics at play.

These family issues are not always easy to discuss. No one necessarily enjoys sharing information about potential family conflicts, personality issues, or other challenges which influence these decisions. However, as a new article in Financial Planning recently argued, failing to address these details often means that a plan will not work as needed.

What are these “human” factors beyond the legal, tax, and technical issues? The story summarizes them as “lifestyle choices, drug addictions, religious practices, health concerns, charitable goals, and preference regarding the disposition of collectibles and other personal property.”

No legal news item last week was bigger than the U.S. Supreme Court’s decision to uphold virtually the entirety of the Affordable Care Act (so-called “Obamacare”). In a move that surprised many observers, in a 5-4 decision the Court deemed the controversial “individual mandate” portion of the measure constitutional on grounds that it constituted a tax. While the court held that the Congress could not pass the law pursuant to its power to regulate interstate commerce, it did find it a permissible use of the legislature’s taxing power.

Now that the matter is reasonably settled, local residents may be wondering how the law affects their New York elder law estate planning, if at all. A recent Smart Money story talked about some of these issues, explaining how certain tax matters will indeed change in the upcoming year as a result of the decision.

A few select rates will change next year. For example, an extra .9% Medicare tax increase will start for various individuals making over $200,000 or $250,000. In addition, some investment income (long-term capital gains and dividends) may face a 3.8% “Medicare contribution tax.” This is in addition to the rising rates if the “Bush tax cuts” expire without renewal.

Most local residents understand that a New York estate plan needs to be updated to account for changing life circumstances. If one is divorced, has a child, has a falling out with a relative, acquires a significant asset, or experiences countless other life changes, then planning documents need to be altered to take that into account.

Unfortunately, some are under the mistaken assumption that this is a very simple, straightforward process involving some changes to a will. Our New York estate planning attorneys appreciate that this sort of thinking often leads to serious problems down the road. Failure to take a full range of issues–beyond a will–into account following life changes may mean one’s plans do not work as desired when the time comes.

For example, the Alternative Press shared an interesting story about a man who wanted to remove a daughter from an inheritance. However, the man only updated his will (and nothing else). The result was the that daughter still received almost half of the man’s estate

Family inheritance disputes are legion. In most cases that make headlines, a famous individual passes away without conducting thorough estate planning and various family members publicly feud to get their fair share of the individual’s wealth. Our New York City estate planning attorneys often advise clients that these sorts of disputes are not only for the famous or even the wealthy. Family disagreements regarding an inheritance are quite common, particularly when no planning is done and the matters must be left up to the court-centered probate process.

Not only that, but sometimes feuding occurs even before the family matriarch or patriarch passes away.

For example, a recent Sacramento Bee letter explored a situation where two siblings seemingly isolated an aging mother from other siblings. Claims of undue influence and abuse were made. The three ostracized siblings were left wondering what options were available to ensure they received their share of the inheritance.

New York elder law estate planning is all about putting plans into place to designate inheritances, account for taxes, plan for disability, and otherwise provide peace of mind to account for long-term financial concerns. However, part of the challenge of the process is realizing that the future is unknown. It is impossible to determine with precision how long one will live, what finances are needed, and what care is required as one ages. Not only is speculation inherent in some of this planning, but changing government policy, medical advances, and societal cultural changes must be taken into account when conducting this estate planning.

No More Retirement Age?

For example, a recent Business Times article discussed statements made by representatives from Wells Fargo that the concept of a retirement age “is going the way of the typewriter, another 20th-century relic.” Instead of retiring at 65, say the executives, most won’t retire until age 80 or beyond. The claims were made following a Wells Fargo survey which found that at least ¼ of all respondents did not believe they’d be able to retired until they were 80 years old. On top of that, most thought that they’d never actually be able to stop working with some extra income needed after retirement.

Our New York estate planning attorneys often help clients create “ethical wills.” An ethical will refers to a document left by an heir to pass along intangible assets like morals, lessons, and memories. Creating one of these wills is an important way to clarify the meaning of one’s life to family and friends, sharing gifts of the heart and mind.

Recently, a Time magazine article discussed how, following the recession, the importance of this ethical legacy planning was growing. While no one welcomes a difficult financial climate, some observers note that a positive side-effect is the growing importance of relationships, experiences, and memories for many families. The article author notes:

“Born out of national need, this national (if not global) rethinking of what is most important has had remarkable staying power, even as the economy has started to improve.”