Articles Posted in Trusts

New York Inheritance Issues in Second Marriages

Published on: October 3, 2011 | by Ettinger Law Firm

Proper Inheritance planning requires much more than simply filing in the blanks on standardized forms. That is why experienced New York estate planning attorneys are essential advisors when local community members are evaluating their long-term financial preparations. Proper planning of these affairs requires consideration of unique family dynamics and an ability to anticipate potential issues before they actually arise. Anticipating possible conflict and accounting for it ahead of time is one of the main benefits that local residents can derive from creating and updating their New York estate plan.

For example, local families often have concerns about the effect that a second marriage will have on their inheritance plans. Many emotions are at play when a parent remarries after a divorce or the death of a spouse. As a CNN story this weekend explained, adult children commonly express apprehension when a parent re-enters the dating pool or indicates a wish to get remarried. Financial concerns are occasionally the cause of that trepidation. One woman who lost her father several years ago explained, “I want my mom to be happy, but how do I know that her suitors don’t have ulterior motives? I’m concerned that she’ll jump into another marriage and her second husband will take advantage of her financially.”

Conversations between loved ones about these issues are frequently thorny and often result in strained family relationships. On one hand, as the article author notes, a parent is free to use their finances as they see fit. After all, an inheritance is not an entitlement but a gift. However, adult children need not stand by if a parent is genuinely making damaging financial decisions or is legitimately being taken advantage of–elder financial exploitation is a common problem. Therefore, in these situations an experienced, trained professional can often provide a crucial perspective to balance the competing concerns.

When Considering Inheritances, Baby Boomers Fear Children’s Financial Acumen

Published on: September 15, 2011 | by Ettinger Law Firm

Professional inheritance planning continues to rise in popularity among all classes of society as more and more seniors reach retirement age and come to appreciate the legal tools available to help in their planning efforts. Interestingly, a new poll discussed in Time magazine this month explains that many of the newest retirees from the Baby Boomer generation have doubts about their heirs’ ability to manage an inheritance. This is a common concern, and our New York estate planning lawyers work with many clients in this area who are specifically tailoring their plans to account for it.

The new survey found that only 49% of millionaire Baby Boomers indicated that leaving money to their children was a priority in their estate planning. When analyzed closely it is clear that the polling figures do not indicate that these parents have stopped worrying about the well-being of their children. Instead, many of them have deep concerns about the effect that a large inheritance will have on their offspring. For example, one-fifth of survey respondents felt that their children would simply squander the inheritance and a quarter of these seniors thought that receiving too much money would only make their heirs lazy. Perhaps because of this, a majority of these retirees admit that they keep their children in the dark about their exact net worth so as to prevent expectations about what will be left behind.

Fear about the financial sense of children has long been a concern for local community members. For decades, attorneys at our New York elder law estate planning firm have worked with residents who were worried about a family member’s ability to handle money. Fortunately, tailoring inheritance plans to account for spendthrift children is exactly a benefit one derives from seeking professional help in this area. A variety of trusts exist which allow parents to pass on the assets they feel appropriate to their heirs in a way that guards against their fears that the inheritance would be wasted, abused, or usurped by a non-relative.

Many Middle Class Families in New York Use Trusts in Estate Plan

Published on: September 6, 2011 | by Ettinger Law Firm

One of our New York estate planning attorneys, Bonnie Kraham, Esq., recently authored an article that shares information on the increasing use of trusts in the estate plan of many local middle class families. The story was published in this weekend’s Times Herald-Record, and explains the various types of trusts that residents can use and the way that each holds and transfers property. Unfortunately, there remains a misconception among some local community members that creating a New York trust is a project only for the wealthy. That is not the case. As attorney Kraham notes, there has been a “living trust revolution” over the past few decades where many middle class families have discovered the ways in which these legal entities can be used to avoid probate, save taxes, and protect assets.

All trusts begin with a written agreement, and each includes at least three necessary parties. These include a “grantor” who creates the trust, “trustee” who manages the assets, and “beneficiaries” who use the trust assets. For example, the three roles may be filled when a senior couple creates a trust (grantors) to be managed by their lawyer (trustee) to provide for the couple’s children (beneficiaries). The three roles need not be filled by different individuals, however. Often a grantor will also act as beneficiary, so that they can still use those assets while they are alive. Following the written agreement which establishes the trust, assets are transferred into the entity by way of “retitling.” This involves changing the name on accounts, mutual funds, and stock certificates to the name of the trust, and transferring title to property to the trust.

The two main types of trusts are testamentary and living. Testamentary trusts are created only after an individual’s death pursuant to their will, while living trusts are created while a grantor is still alive. Living trusts are an increasingly common way for many families to transfer assets at death. Among other benefits, a living trust can help families avoid probate, saving time and expense in closing the estate.

Parents Grapple with Effect of Inheritances and the Meaning of Money

Published on: June 4, 2011 | by Ettinger Law Firm

New York inheritance planning involves passing on values as well as assets. No matter how large the family estate, most parents think long and hard about how their inheritance will affect the lives of their children. For many there are no easy answers to questions like how new wealth will affect their children’s independence or how much wealth is the appropriate balance between proper inheritance and philanthropy.

As a story last week in the Belleville News Democrat explained, many parents are taking steps to share important information about the meaning of money as part of their inheritance plan. Most families strive to pass on the right amount of money so that children are provided for but still maintain the incentive to work, strive, and succeed.

One hardworking family, including a 60-year old retired teacher and 62-year old real estate broker, explained how they have worked with their now 30-year old daughter on financial matters, noting “We really want to encourage her to develop a personal financial plan, a personal philosophy, and become really familiar with the types of investments.” The family admits that frankness and early discussions about these issues is important. Children should know what to expect and parents should not be afraid to share their concerns with their loved one.

Some are worried that their loved ones may be unprepared to handle the estate that they receive. Those families often face issues with asset planning for spendthrift children. They are aware that their children are poor at handling money or inexperienced with such matters. Many options exist for parents in those situations. For example, trusts are perfect tools to ensure that a child has access to reasonable assets but is unable to abuse the overall value of the estate. In these situations a designated “trustee” manages the actual estate with rules about what the child receives and when they receive it.
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