New York Estate Planning & Elder Law Blog

Life Insurance and Business Succession Planning

Published on: August 28, 2016 | by Ettinger Law Firm

Few people think about what will happen to their business after they die and therefore rarely put together a plan. Fewer may even think that a family or closely held business should be considered a part of their estate plan. However, for many small business owners, their financial interest in their business may be the largest asset that they have and represent most of the wealth that they will transfer at the time of their death. When transferring a family or closely held business, a well-funded life insurance policy can play a very large role in a smooth transition.

Providing For Your Children

There are a number of contingencies that a business owner has to consider when transferring their interest in their family or closely held business. While family businesses may be a truly family affair, with children working, operating and managing the business as well as the parents, it is a fact of life that not all of the children may be interested or suited to taking ownership of the business. In some cases, there might not be any children that wish to take over.

The Law – Charitable Trusts

Published on: August 27, 2016 | by Ettinger Law Firm

An Overview

A trust is established by an individual, referred to as a settlor, who seeks to have their property held for the benefit of another party. When it comes to charitable trusts, the settlor intends to have their property or assets transferred for the benefit of one or more charities.

Charitable ‘split interest’ trusts have a number of benefits, not only because they allow the settlor to give to both charitable and noncharitable beneficiaries, but they also reduce the amount paid in estate taxes, they eliminate capital gains, provide an income tax deduction and also provide for and benefit charitable organizations versus paying the IRS. There are two different kinds of charitable ’split interest’ trusts available, which differ depending on the property or assets you seek to donate to the charity, how you want the property to be distributed, as well as any wealth preservation measures you seek to have followed.

No One’s Favorite Inheritance

Published on: August 25, 2016 | by Ettinger Law Firm

Parents believe that leaving their children the family home is a great boon but experience shows that beneficiaries are not happy with the bequest.

For many people in the United States chances are that their house is their most valuable asset. It makes sense then for most parents to leave their most valuable asset to their children. But this common inheritance is only a blessing for a small few of beneficiaries and a burden on most others.

Not A Quick Sell

New York Medicaid Law – Pooled Trusts

Published on: August 23, 2016 | by Ettinger Law Firm

Pooled Trusts Eligibility

Pooled Trusts are a type of trust applicable to those individuals who are seeking public assistance benefits, such as Medicaid, to become eligible financially by setting aside funds in a trust for additional needs. The trust allows its beneficiaries to preserve a specified amount of money in a trust to pay for supplemental care not covered by public assistance programs. For the elderly, many need public benefits assistance as they continue to age but do not qualify based on higher income. In these situations, a pooled income trust will benefit an elderly person by allowing them to continue their lifestyle, which is usually seeking to stay in the home, while also obtaining homecare services and paying for what their budget requires.

New York Medicaid Rules

IRS Proposal To Overturn Common Asset Valuation Planning Met With Fierce Resistance

Published on: August 22, 2016 | by Ettinger Law Firm

Newly proposed IRS regulations meant to curb common estate and gift tax planning tactics is being met with a firestorm of resistance from financial advisers and estate planners across the country. The proposed regulations (REG-163113-02) place limitations on the use of current valuation discounts that reduce the overall value of assets in family-owned businesses, thus lowering a decedent’s estate and gift tax liability at the time of death. The IRS hope to achieve this end by disregarding restrictions that enabled taxpayers to use these discounts in the past.

Wealth Preservation In Closely Held Businesses

Currently, interests in closely held businesses are not taxed the same as other property interests due to their illiquid nature. Many tax and estate planners put a family’s assets in a closely held business to reduce their estate and gift tax liability. While this is a boon for many families seeking to preserve their wealth, others argue that what started out as a helpful tax break for legitimate family businesses is being abused and exploited by those who have no legitimate use of it.

Back To Basics: Witnesses and Your Will

Published on: August 20, 2016 | by Ettinger Law Firm

It is common knowledge that in order for a New York will to be valid that there must be other people to witness you signing your will as well as putting down their own signatures on your will. Despite this knowledge though improper execution of the will is the most common reason that a will is found to be invalid.

Why Do I Need Witnesses At All?

Witnesses provide an important evidentiary function to the probate process. Witnesses to your signing can provide first-hand accounts of the execution of the will. If a will is ever contested, the witnesses can testify about the procedures that were followed when executing the will, the testamentary capacity of the testator as well as the mental capacity of the testator.

The Housing Issue and The Elderly

Published on: August 18, 2016 | by Ettinger Law Firm

There are many factors that go into maintaining a budget in a family while also trying to save for the future. For Americans, the cost of maintaining a household has gotten continuously more expensive; the average cost of raising a child born in 2013 now costs roughly $245,000 for a middle income family in the United States, with housing for the child accounting for about 30% of those costs. This is compared to a study done in 1960 by the United States Department of Agriculture that stated middle income families could expect the average cost of raising a child to be a little more than $25,000 until age 18. Interestingly in both studies, housing accounted for the largest expense for the families surveyed. The children once focused on in these 1960s studies have now become the focus of our article, and one thing remains the same, housing is still the biggest expense they must account for.

As the aging population refocuses their priorities for housing, they must consider factors such as accessibility to stores, services, transportation, medical care if they experience chronic conditions, as well as access to social settings and connections. The worry of many aging people is that they will be forced to leave their home and instead reside in an assisted living or nursing home in order to retain government assistance with healthcare. There will also need to be a refocus on the ability to provide for a more diverse population of elderly people; with the thousands of individuals turning 65 years old daily over the next two decades will come a much more diverse population that has had drastically different housing situations.

Possible Solutions

Springing and Durable Powers of Attorney

Published on: August 17, 2016 | by Ettinger Law Firm

The Durable Power of Attorney is a powerful estate planning tool that everyone should have. Properly drafted, a Durable Power of Attorney allows for the right person to be able to manage your affairs when you are physically or mentally unable to do so. However, a Durable Power of Attorney goes into effect once executed and generally grants someone else great power to make decisions for you and to enter into agreements on your behalf. Many people may be uncomfortable granting these powers to someone else while they are still capable of managing their own affairs. Is it possible to delay the effects of a Durable Power of Attorney?

What Is A Power of Attorney?

A Power of Attorney is a legal document that is used to delegate legal authority to another. The person who signs a Power of Attorney is called the Principal. The Power of Attorney gives legal authority to another person called the Agent or Attorney-in-Fact to make financial and legal decisions for the Principal. The authority that the Principal grants the Agent can be as broad or narrow as the Principal wishes. It is entirely dependent on what powers the documents grants the agent.

Common Estate Planning Mistakes

Published on: August 15, 2016 | by Ettinger Law Firm

Planning how your assets are going to be distributed and for your health care needs is an important tool all adults, not just elders should utilize. However, over 60% of Americans have not made a basic will. There are many misconceptions about estate planning and the reasons for it, which has led many Americans to shy away from the process.

Common Mistakes & Misconceptions

Estate planning is for the elderly or the wealthy. Determining how you want your property distributed or what you would like to happen to you in the event you can no longer speak for yourself are tasks everyone needs to think about. Even the most simple finances can become complicated when there are multiple parties involved.

The Rapidly Disappearing Inheritance

Published on: August 15, 2016 | by Ettinger Law Firm

Beneficiaries Often Treat An Inheritance As A Windfall And Spend It As Such

You spend your entire life working hard, accumulating wealth and you want to pass it onto your children, to provide for them and their families after you have passed. But will they appreciate your life’s earnings or will they blow through it without a second thought? Unfortunately, more likely than not any inheritance that you leave behind will most likely be spent much faster than it was earned, and the statistics are alarming.

“From shirtsleeves to shirtsleeves in three generations” the old saying goes and the research shows that the sentiment is true. One third of people who received an inheritance had negative savings within two years. Even if the wealth does last past the first generation to receive it, 70 percent of inheritances are completely gone by the end of the second generation.