Trusts

Estate Lawsuit Reinstated Involving Claimed Executor Fraud

Published on: January 6, 2014 | by Ettinger Law Firm

Famed rock music promoter Bill Graham made his name as the organizer of popular music festivals and concerts. His events are credited for launching the careers of legendary groups like the Grateful Dead, Jefferson Airplane, the Eagles, and many others. Unfortunately, Graham’s life was cut short over twenty years ago, as he died in a helicopter crash in 1991.

In a testament to the longevity of many estate battles, just last week, a lawsuit involving Graham’s estate was revived by a federal court. The case is yet another reminder of the need to be very careful about all aspects of estate planning–from use of trusts to selection of executors–in order to give your family the best possible chance of handling these matters without conflict.

The Estate Battle

The Basics: The Importance of Living Trusts in Estate Planning

Published on: January 2, 2014 | by Ettinger Law Firm

An important element of estate planning is ensuring the financial security of your family after you are gone. Like most people, we have worked our lifetime to provide financial stability for not only ourselves but our loved ones. An easy, burden-less way of providing for your loved ones is through a living trust.

As outlined here, a living trust holds many advantages compared to a will. Establishing a trust is fairly easily. Upon creating the living trust agreement, you essentially transfer a portion, or all, of your assets to a trustee. To retain control of the assets, people sometimes name themselves as the trustee. A grantor must name beneficiaries to the trust who will inherit the trust upon your death. Establishing a living trust bank account will allow you to solidify your savings while also easing any financial burden on your beneficiaries. The provisions of the trust can always be changed, or if you have second thoughts the entire trust can be revoked.

A living trust provides three important factors. Firstly, living trusts avoid the probate process. At the time of the person’s death, the assets of the trust will pass directly to the named beneficiaries. Secondly, living trust provide privacy that wills cannot by avoiding probate. A last will and testament that has been admitted to probate becomes a public record that anyone can freely see and read. In contrast, a living trust agreement, the property, and the beneficiaries remain private. Lastly, a living trust avoids a will contest. A living trust goes into effect the moment it is created, and a contestant must prove the grantor was incompetent or under the influence at the time the trust instrument was signed and the assets were transferred. This is a very hard, possibly impossible, burden to overcome.

Gift Tax Benefits Expiring At End of Year?

Published on: December 20, 2013 | by Ettinger Law Firm

Timing is critical in estate planning for many reasons. Most obviously, because plans are intended to help ease the burden in the aftermath of a death, they must be in place before one dies (or loses the capacity to make legal decisions). But timing also matters to the extent that the law changes and alters the options available to planners.

This is most clear when it comes to taxes. Different tax rates, allowable deductions, and other details are frequently changing. Many individuals act quickly to take advantage of certain favorable situations before they are set to expire.

IRA Gift Tax Break

Beyond Pet Trusts — The Rise of Pet Hospice Care

Published on: December 17, 2013 | by Ettinger Law Firm

In recent decades, “pet trusts” have grown in popularity as a way for residents to include their beloved animal companions in their estate plans. Our estate planning attorneys work with residents in this regard, setting aside appropriate assets to ensure pet dogs, cats, and other animals have funds available to pay for their well-being for the remainder of their lives. Considering that many New Yorkers consider their pets in similar terms as children, it is only natural to provide for them in Will and trust documents.

But there is now a move to take long-term animal planning to another level with the growth of pet hospice services.

Helping your Dog Pass on Gracefully

“Donor Advised Funds” Gaining in Popularity

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

Every day thousands of New York residents give donations of all sizes to popular charities. From dropping a few bucks in a local red bucket during holiday season to making multi-million dollars gifts to universities and everything in between, millions of residents are committed to giving a portion of their wealth to others.

Charitable giving is an important part of many long-term financial plans and estate planning efforts. While giving to charity may seem like a straightforward process–no different than buying a birthday gift–in reality, these donations can be structured in sophisticated ways to benefit both the donor and donee. New Yorkers are advised to speak with legal professionals to learn about their options.

Donor Advised Funds

Later-Life Marriages and Prenuptial Agreements

Published on: December 8, 2013 | by Ettinger Law Firm

The “Golden Years” – that peaceful time of life after retirement; a time to watch the grandchildren grow up, to take that long-awaited vacation and to….get married? Statistics indicate that both men and women are getting married later in life, and although the rate of marriage and remarriage significantly declines with age, an estimated 500,000 Americans 65 and older get married (or remarried) every year.

While marriage at any age raises a number of legal and financial concerns, individuals 65 and older who marry later in life tend to bring significantly more assets to a marriage than individuals who marry earlier in life. In addition, those entering into in these later-life marriages are more likely to have adult children, and even grandchildren. For these reasons, it is critical that those who rediscover love during their “Golden Years” be mindful that the failure of these types of marriages can create complex estate planning legal issues.

A unique problem for later-life marriages involves potential disputes between a surviving spouse and the adult children from a previous marriage. Most states require that a portion of the deceased spouse’s estate pass to the surviving spouse. This portion is known as the elective share. In New York, that share is equal to 1/3 of the deceased spouse‘s estate. New York, like most states, does not allow the disinheriting of a spouse to his elective share unless the spouse to be disinherited legally consents. Consequently, spouses who want to determine the terms of possession of their assets upon their death should consider creating a prenuptial agreement, one made by the spouses prior to marriage that concerns the ownership of their respective assets in the event of divorce. Without a prenuptial agreement, a “Golden Years” divorce has the potential to lead to a disastrous, and often disheartening, outcome.

New Decision on Valuation of New York LLC for Estate Tax Purposes

Published on: December 2, 2013 | by Ettinger Law Firm

Last month the United States tax court issues a decision in a case which caught the eye of many involved in estate planning matters. The main issues in the case, Tanenblatt v. Commission of Internal Revenue, was the value of a deceased individual’s interest in a limited liability company. As most know, estate taxes are based on the value of the total assets owned by an individual at the time of passing. Consequently, determining the exact value of items like a business interest are critical in determining the tax burden. As you might imagine, there is frequently disagreement between surviving family members and the IRS regarding the overall assessments.

LLC Value

The tax court opinion (viewed in full online here) explains how the case involves a family that received a notice of deficiency from the IRS, claiming that an additional $309,000 in federal estate taxes was due. The discord was caused by confusion over the value of the decedent’s interest in a New York LLC (the 37-41 East 18th Street Realty Co.). As the name implies, the LLC’s main asset was a building on 18th Street in New York City. In preparing their tax return, the family essentially determined the value of the building (using an income capitalization approach), added a few smaller assets, applied “net asset value” (discounts for various reasons), multiplied by the individual’s percent interest and determined the value of the share in the LLC — around $1 million.

The Estate of New York Musician Lou Reed

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

Celebrity estate planning remains one of the most common ways that local residents are confronted with issues regarding wills, trusts, and other inheritance issues. As the old adage makes clear, the only certainties in life are death and taxes. It does not matter whether one is a billionaire, international celebrity, elementary school teacher, or anything in between. We will all face death and deal the the aftermath of a passing.

In that way, it is useful to take advantage of high-profile deaths as a way to again share information on the value of estate planning.

The most recent celebrity planning story to hit the headlines is that of famed musician Lou Reed. Reed died in late October in Southampton, New York following liver disease complications at the age of 71.

What Matters When Choosing an Executor?

Published on: November 1, 2013 | by Ettinger Law Firm

Understanding the specifics of the law is just one aspect of successful estate planning. Obviously it is critical that a will is created in a such a way that it will be upheld or that a trust will have legal effect (or that you take advantage of all available trust options to begin with).

But that legal knowledge is not enough to best prepare for the future. In addition, it is critical to understand the social, emotional, and practical considerations that affect these issues. Are certain family members more likely to feel jilted by a specific arrangement? Is there a financial danger that should be guarded against? These and hundreds of other questions must be considered when planning. Memorizing statutes and legal books will only provide so much guidance–experience on these issues fills in the gaps.

Advice for Executor Selection

Back to the Basics: Trusts Are Not Only For the Wealthy

Published on: October 31, 2013 | by Ettinger Law Firm

One of the biggest misconceptions about general estate planning is that a “trust” is something that only rich families need to consider. This perception likely arises from colloquial use of “trust funds” to signify wealthy individuals who are living off substantial earnings preserved for them in a trust.

A better understanding of the legal tool takes away much of the mystique. The bottom line is that trusts are for everyone, serving as an incredibly useful option for middle class New Yorkers to protect assets accumulated over a lifetime for themselves and their loved ones.

The Basics