New York Estate Planning & Elder Law Blog

Estate Planning and Buy-Sell Agreements for Your Business

Published on: May 16, 2017 | by Ettinger Law Firm

Comprehensive estate planning can be an extremely complicated process for an individual. This is even more true when the individual owns a business. The owners of closely held businesses own businesses with a limited number of shareholders and the stock in such businesses is not regularly traded publicly. While this type of business can provide many benefits for business owners, it can also create issues when one of the business owner dies. However, structuring a buy-sell agreement for a closely held business can help make estate planning easier when it comes to your interest in such a business.

Redemption Agreements

With a redemption agreement, the company itself purchases a life insurance policy on the various owners of the company. When one of those owners die, the sole owner of the life insurance policy – in this case, the company – will receive the benefits of the life insurance policy and can buy back the deceased shareholder’s shares. There are some potentially negative tax consequences for this type of arrangement, including the possibility of the business to be subject to the current corporate alternative minimum tax on the proceeds from the life insurance policy.

When Turning Down an Inheritance Might be a Good Idea

Published on: May 15, 2017 | by Ettinger Law Firm

Being named as a beneficiary to the estate of a loved one often comes with its own set of responsibilities and expectations following the passing of the deceased. Often times, individuals create estates and trusts to ensure their hard earned assets like homes, businesses, and sentimental items remain with close family members to ensure these articles are well taken care of and create a lasting legacy for future generations.

However, sometimes the strings attached with inheriting such assets are simply too much for the beneficiary to bare and could actually create a burden instead of benefit. Many of us have probably seen movies or heard news reports of beneficiaries needing to perform some sort of unusual task to claim an inheritance like taking care of a pet or living in a home for a certain period before the property may be sold.

While many of these examples are rare and impractical to say the least, there are many times when accepting an inheritance can create untenable financial liabilities like paying property taxes on homes and businesses. Despite the financial hardship some inheritances create, beneficiaries may still want to ensure their portion of the estate remains under their sphere of influence and provide some good to other families members down the line.

Tips for Selecting a Guardian for Minor Children

Published on: May 13, 2017 | by Ettinger Law Firm

Comprehensive estate planning is a deeply personal process. There are so many different factors to consider, and working with an experienced estate planning attorney can help streamline the process and ensure that you explore all of the aspects of estate planning that pertain to you. One of the most difficult parts of comprehensive estate planning is selecting a guardian for your minor children if both parents should become deceased or incapacitated at the same time, leaving neither able to care for any shared children. As difficult as the process can be, it is extremely important to undertake it so that the best interests of your children are provided for in a worst-case scenario. The following are some tips in approaching the guardian selection process and provide some important considerations for you to remember when selecting a guardian, and an experienced estate planning attorney can help you with the process.

Choose Compatible People

Most people put a great deal of planning and thought into how they choose to parent. It is important for your peace of mind as well as your children’s well-being that you select individuals that share a similar parenting style and outlook. If academics are important in your household, make sure that they are also important to prospective guardians. Additionally, making sure that individuals you are considering as guardians are ready to undertake the responsibility that comes with it is extremely important.

What are the Rules for Medicaid Asset Transfer in New York?

Published on: May 12, 2017 | by Ettinger Law Firm

Medicaid is a terrific program designed to help older Americans pay for the cost of their prescription medication, hospital care, and even long term assisted living facility needs. Of course, like any other program, the system is in imperfect and comes with its own unique set of limitations, restrictions, and penalties that seniors and their families need to understand in order to take full advantage of under the law.

Designed as a resource to help low income and disabled seniors, Medicaid requires applicants meet certain financial criteria to qualify for benefits. Sometimes, seniors find themselves in a delicate situation where the state considers them too wealthy to qualify for Medicaid but unable to pay for vital nursing and hospital care on their own. In these circumstances, seniors may need to spend down or transfer assets to qualify for Medicaid assistance.

While this may seem like a practical idea, application for Medicaid in New York requires seniors to disclose asset transfers over the previous five-years to ensure applicants are truly in need of government assistance. The Department of Social Services ”looks back” at financial transactions made by the applicant or his/her spouse and may institute a so-called “penalty period” on non-exempt transferred assets which creates a waiting period on benefits which varies depending on the situation.

Estate Planning and Private Annuities

Published on: May 10, 2017 | by Ettinger Law Firm

As we remind our clients, tax concerns are a major part of a comprehensive estate planning strategy. Anticipating the potential tax consequences related to your estate as well as those that might arise prior to, during, or after the disposition of your assets is an integral part of making sure your loved ones don’t inherit a significant tax burden that limits the amount of assets you pass to them. For some individuals, private annuities may offer a way to avoid the high costs of estate taxes, gift taxes, and other taxes related to estate planning.

The Benefits of Private Annuities

Basically, private annuities can be used to help reduce your potential estate tax liability while avoiding the gift tax and securing a steady stream of income for the grantor. They are termed “private” because they are privately structured rather than created by some commercial entity. A private annuity allows the individual to essentially transfer that asset to the heir in exchange for lifetime payments for the property. As the person receiving the property will be paying the grantor for it, private annuities typically count as a sale instead of as a gift of property.

Erie County Launches New Task Force to Combat Senior Exploitation

Published on: May 8, 2017 | by Ettinger Law Firm

The Erie County District Attorney recently announced the creation of a new enhanced multidisciplinary team (eDMT) to help combat the 1,600 cases of senior financial exploitation reported each year in the country. The approach is a brand new model design to create a public-private partnership across multiple disciplines to investigate, prosecute, and educate the public about the very real danger facing many vulnerable elders both in the county and the state as a whole.

According to the Erie County District Attorney’s website, the eDMT “is coordinated by social worker Kathy Kanaley of Center for Elder Law & Justice, and includes the Erie County District Attorney’s office and representatives from Erie County Adult Protective Services and Senior Services.” Furthermore, the task force includes a forensic accountant assisting in the accounting of stolen funds, as well as a geriatric psychiatrist to help with determinations of capacity.

“This collaboration will help our office spot and aggressively prosecute those who prey on these vulnerable members of society,” said Erie County District Attorney John J. Flynn. “The sooner we can take action, the easier it will be to get justice for these elderly victims.”

Changes to the Estate Tax Lien Process

Published on: May 8, 2017 | by Ettinger Law Firm

Estate planning is heavily dependent upon the law both at the time of planning and at a person’s time of death. The law is constantly changing, especially laws that impact estate planning. That is why it is crucial to make sure that you work with an experienced estate planning attorney that can help you stay abreast of changes in the law that could affect your estate plan. Recently, such a change occurred regarding the estate tax and lien releases.

What is an estate tax lien?

Internal Revenue Code 6324 says that a federal estate tax lien is put in place on the day a person passes away. This allows taxable assets to be determined, at which point property may become subject to an assessment lien until such time as any taxes due are paid in full. What this means is that the executor of a person’s estate, or the people responsible for the disposition of the deceased person’s property, cannot dispose of real property until it is discharged from either the estate tax lien or the assessment tax lien. If you try to dispose of any real property prior to it being discharged, the buyer of the property will be unable to take the property free and clear of any liens that may be placed on it. This could cause unexpected delays and other issues related to the disposition of property within an estate. By placing such liens, the Internal Revenue Service is able to ensure that any taxes due to it by the deceased or as part of the deceased’s estate are actually paid.

Understanding Donor Advised Funds

Published on: May 5, 2017 | by Ettinger Law Firm

Many individuals want to make sure that part of their estate is dedicated to their favorite charitable causes, and many make the move to guarantee this during their lifetime. There are several ways to do this. Some individuals may consider structuring an endowment while other may choose deferred gifts or planned giving. Another vehicle to ensure your charitable wishes are carried out can include the creation of a private foundation. However, for some people, the best option for charitable donations during one’s lifetime and after might be to create a donor advised fund.

The Basics of a Donor Advised Fund

When we give to various charities, their tax status allows us to take advantage of a tax deduction. However, in order for our donations to qualify as tax deductible, the organization must typically be registered as what is known as a 501(c)(3) organization. These types of organizations must comply with certain rules established by the IRS, including restricted political and legislative activity while following other important guidelines. The IRS defines a donor advised fund as a fund or account that is maintained and operated by a 501(c)(3) organization known as the sponsoring organization.

Avoiding Probate when Passing on an Estate

Published on: May 3, 2017 | by Ettinger Law Firm

Executing a will or estate through probate court can be a costly, time consuming process full of surprises and complex issues. On top of that, the probate process creates a public record of the proceedings that may reveal information individuals wish to keep private, including debts, real estate holdings, and prenuptial agreement agreements.

Fortunately, New York probate law gives individuals planning their estate options to avoid this burdensome process by creating living trusts, setting up joint ownership, and various transfer agreements. However, even these options come with various challenges that can complicate what is meant to be a less stressful process.

By thinking ahead, weighing options, and speaking to an experienced estate planning attorney, individuals and couples can tailor a plan that best suits their needs and ensures their final wishes are carried out with the greatest benefit to survivors. Here are some common ways to avoid probate court in New York.

Long-Term Care Insurance and Estate Planning

Published on: May 2, 2017 | by Ettinger Law Firm

Almost every post, we remind people that estate planning is a comprehensive undertaking that has many different options that can be tailored for individual needs. Experienced estate planning attorneys can help clients understand the role that different option can play in the estate planning process. Another vehicle that can provide individuals and their loved ones with financial security is long-term care insurance. With the growing cost of medical care and the average life expectancy of people reaching 65 today at approximately 85 years of age, high healthcare costs can become a severe drain on a family’s financial resources. However, planning for the cost of long-term medical care can help you maintain the bulk of your estate to distribute to your heirs as you see fit.

What Is Long-Term Care Insurance?

Long-term care insurance not only protects your heirs from the expenses associated with caring for elderly family members, but can also help you prepare for the costs of caring for your aging family members. The purpose of long-term care insurance is to help offset the costs of long-term care that can come with age. For instance, caring for an aging family member that has developed cognitive impairments such as Alzheimer’s disease can sometimes require a daytime visiting nurse while you and your family are at work and/or school, or even around-the-clock medical care in a nursing home facility.