New York Estate Planning & Elder Law Blog

Huguette Clark Estate Sues New York Hospital for Exploitation

Published on: December 5, 2013 | by Ettinger Law Firm

Just when it seemed that the years-long New York estate battle related to the heiress Huguette Clark was over, another chapter develops. Last week the NY Daily News reported on a lawsuit filed by Clark’s estate against Beth Israel hospital over claims that administrators at the facility exploited the elder Clark for the institution’s own financial gain. This comes on the heels of a final settlement in Clark’s contested Will from 2005.

Exploitation Lawsuit

According to details released in the complaint, the Clark estate is seeking upwards of $100 million from the Beth Israel Medical Center which, the estate claims, was unlawfully taken from Clark by “secluding” the heiress in the hospital for decades in an effort to extract gifts from her (on top of charging rent).

Would Changes to Charitable Tax Deductions Affect American Gifting?

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

Many New York residents make charitable giving a part of their estate plan. Whether for estate tax benefits to pass on values and ethics to family members and many other reasons, residents commonly set aside certain assets to go to causes about which they are passionate.

However, according to a new report from a conservative “think tank” if any changes are made to federal rules about charitable tax deductions, then one can expect total giving in the country to decrease by billions each year. Before delving into the details it is critical to point out that the group releasing the study, the American Enterprise Institute (AEI), is known as a long-time opponent of all changes which would increase tax revenues. In addition, this AEI estimate is far higher than that found in similar studies by other groups.

The Charitable Giving Report

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.

Congressman on Future of Estate Tax

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

At the beginning of 2013, a federal compromise was reached which seemed to put to rest the uncertainty surrounding the estate tax. Based on the January law, the federal estate tax excludes property up to $5.25 million this year, with that figure set in the future and pegged for inflation. The top tax rate for assets over that amount is 40%, representing a slight increase from the previous level of 35%. In addition, the new law keeps transfers between spouses tax-free and makes “portability” permanent. Portability is the tool that allows one spouse to take advantage of the other spouse’s unused exemption.

Importantly for New York residents, all of those details apply only to the federal estate tax. There are still New York inheritance taxes to consider which take effect at a far lower level–$1 million.

The Future

New Tech Tools Changing Elder Care

Published on: November 25, 2013 | by Ettinger Law Firm

The look and feel of elder care in the United States is changing. In the distant past, most care was provided by friends and family members at their own homes. Later, larger facilities (nursing homes) were built to provide more consistent care to all seniors, especially those without options for family support. Now, however, care is shifting back to the home. This change is pushed by many factors, including the rising costs of nursing home care and the preferences of individual seniors to avoid institutionalized living.

More Options Than Ever

One interesting driver of the change are advances in technology which offer increasing support options available to seniors living at home. A Huffington Post story explored the different ways that these tools are helping improve elder care. While some of the most advanced systems are still in the works, many simple tech tools are already being pushed out to greatly improve senior services.

Inheritance Dispute: Family Claims IRS Overvalued Artwork

Published on: November 21, 2013 | by Ettinger Law Firm

Estate tax rates at both the federal and state level are set by lawmakers, and there is little that any individual can do on thee law. However, residents can significantly alter their tax burden with smart estate planning–like prioritizing tax free transfers (to a spouse), using protected trusts, and more.

But there is also another aspect to the estate bill that is often overlooked–the appraisal. The tax burden is based on applying a tax rate to the value of an asset. But who decides the value? Actual laws which set the rates cannot account for this detail, and so disputes about appraisals are quite common, often with millions of dollars on the line.

Theoretically, the value of many different assets can be disputed. But in practical terms there are some types of property that are open to far more value uncertainty, often spurring challenge. Perhaps the most obvious example is that of high-end artwork. There may be significant disagreement about how much each piece of art is worth.

Be Aware of Trust Fund Theft At Nursing Homes

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

Most fears about moving into a nursing home concern abuse and neglect. After living independent lives on one’s own, it is easy to understand why seniors may wish to avoid moving into a facility where they will rely on others (strangers) for day to day aid. Unfortunately, beyond the physical, emotional, and sexual mistreatment that can occur at these facilities, there is another risk–financial theft.

Wide Scope

As the USA Today reported recently, far too many nursing home workers use their position of control to enrich themselves at the expense of the residents in their care. One of the most common crimes is stealing discreetly from nursing home controlled trust accounts. When moving into a home, many seniors have their personal savings moved into trust funds managed by the facility. Yet, without properly oversight, those funds can be raided for personal gain without anyone ever discovering the problem. Even when it is discovered, it is sometimes too late for the senior to get any money returned. According to some advocates, this is a problem that has flown under the radar too long.

Understanding “Specialty” Trusts

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

Many New Yorkers remain unfamiliar with the benefit and flexibility of using trusts to plan for the future and protect assets in the present. Trusts can prove useful for all residents, including most middle class families. In our work with estate planning, we often help set up basic living trusts which help avoid probate and streamline the inheritance process. On the elder law side, Medicaid Asset Protection Trusts are used to protect assets from the “spend down” requirement needed to qualify for Medicaid and secure necessary long-term care.

Beyond those two trusts, however, there are many other options that may prove useful depending on your specific situation. A LifeHealthPro article last week discussed a few “specialty” trusts. A review of the topic is a helpful way to get an idea of the true scope of trusts and the many different ways that they may be used to carry out very specific wishes.

For example, some of the trusts mentioned in the story include:

Stepping in to Prevent Elder Self-Neglect

Published on: November 18, 2013 | by Ettinger Law Firm

Elder neglect is a concern for all New York families. When conducting long-term care planning, at the forefront of many minds is ensuring one does not end up in a poor care facility that is prone to abuse and mistreatment. With so many horror stories coming out of some nursing homes, this is a natural concern.

But believe it or not, some elder care advocates suggest that the single most prevalent problem is elder self-neglect. This refers to situations where a senior is in need of extra care for any number of daily tasks and fails to do anything about it. An Examiner story on the subject notes that, when using statistics from the Public Policy Institute of AARP, nearly fifty percent of all reported cases of neglect by be of this variety.

The Causes of Self-Neglect

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.