New York Estate Planning & Elder Law Blog

Estate Planning and Debt

Published on: April 28, 2017 | by Ettinger Law Firm

Estate planning is a complex process that involves a great deal of attention to detail. However, truly comprehensive estate planning goes beyond creating a Last Will and Testament or even a trust and includes things like understanding how debt will affect your estate once you die. The best way to avoid the negative effects of debt on your estate is, of course, to avoid debt. However, that is often impossible to do today. In fact, according to sources cited by a recent Yahoo! Finance article around 73 percent of Americans have outstanding debt when they die with an average debt of $62,000 per person. As such, it is important to understand your debt as well as how to manage it appropriately to minimize any potential financial burden such debt could cost your loved ones.

Different Types of Debt

There are several different types of debt, and understanding the differences between them as well as how each type will affect you can help you understand how to manage them. The first type of debt is secured debt. Secured debt is debt that has been guaranteed by some type of collateral. This allows lenders to provide better interest rates on secured debt because a default on such debt typically awards the collateral to the lender. The most common examples of secured debt include residences and vehicles.

Fives Ways to Protect Your Estate Plan

Published on: April 28, 2017 | by Ettinger Law Firm

Estate planning should be a lifelong process. It is never too early to start the estate planning process, even with minimal assets at a younger age. Once you have a comprehensive estate planning framework in place, it is important to update it as life events change your circumstances. Much like your life is always evolving, so should your estate plan. It must be reviewed on a regular basis to ensure it is up-to-date and continues to comply with changes in laws governing it. When you put this much time and effort into such an important component of protecting your loved ones, it is important to ensure there are mechanisms in place to protect it. The following suggestions, adapted from a recent article from CNBC, can help you ensure your estate plan is secure.

Pre-Paid, Pre-Planned Funerals

When a loved one passes away, it can be an extremely difficult experience. One of the most difficult parts of the grieving process is trying to make funeral arrangements while grieving, and funeral expenses can often be very high. By pre-paying for your funeral arrangements, you can spare your family from the unexpected costs related to funeral expenses while also saving yourself money by locking in prices before they grow over time. Pre-planning your funeral arrangements allows you to ensure that your wishes for your funeral are carried out and help your family avoid stressful decisions during the grieving process.

Don’t Discount Social Security in Estate Planning

Published on: April 26, 2017 | by Ettinger Law Firm

One of the most important components of estate planning is ensuring that you have an in-depth understanding of your assets. Not only is this important at the onset of estate planning, but it is an important factor to consider when looking down the road to the future. With lawmakers painting a sometimes bleak and uncertain future for social security, many individuals are looking at ways to plan for their financial future in case they are unable to rely solely on social security. While this is certainly a wise financial move, discounting social security’s impact on your estate can be a costly mistake.

As it stands now, social security provides a steady stream of monthly income when conditions for its receipt are met. That’s not likely to drastically change anytime soon. Given that the current projected life expectancy for those turning 65 this year is approximately 85, those monthly payments could add up to around $1 million over the terms of period of installments. A recent article from MarketWatch.com reminds us that we should not discount the impact social security can have on our estates, and an experienced estate planning attorney can help you understand what social security benefits can meant to your estate.

Social Security as a Safety Net

What are my Guardianship Options for my Parents?

Published on: April 26, 2017 | by Ettinger Law Firm

As our parents age, many of us begin to take on greater roles concerning basic needs like overseeing finances, medical care, and other tasks. Often times, some form of guardianship is necessary to ensure our loved one’s best interests are executed by financial institutions, hospitals, and even local governments. Even loved ones capable of handling many responsibilities themselves can use assistance from family members.

Fortunately, New York elder law gives family members the right to step in and request guardianship as well as allow competent elders the right to agree to guardianship and allow a family member to make certain decisions on their behalf. Whether you find yourself in either circumstance, an experienced and dedicated New York elder law attorney can help the process goes as smoothly as possible and your beloved elder has his or her needs met.

New York guardianship elder laws

Estate Tax Portability Elections and Extensions

Published on: April 23, 2017 | by Ettinger Law Firm

Laws governing estate planning are extremely complex and can change frequently. Working with an experienced estate planning attorney can help you anticipate changes to applicable laws as well as adjust your estate plan to continue providing the benefits you want whenever the law does change. One of the most misunderstood elements of estate planning involves the estate tax. Many individuals don’t believe the estate tax will apply to them because their estates are not large enough to exceed the exemption allowed, which in 2017 is $5.49 million for individuals and $10.98 million for married couples. While this is often true, many people often don’t calculate the value of their estate correctly. Even an otherwise average estate can exceed the exemption limit, especially if you factor in one spouse dying first and the second spouse inheriting the bulk of first spouse’s estate. However, there are tools that can protect your assets from the estate tax by keeping it within your allotted exemption amount.

Portability Elections

A portability election is a tool available to spouse’s that survive the other spouse. When one person in a marriage dies, their estate is totaled to determine what – if any – tax consequences are triggered. When a first-to-die spouse’s estate is completely covered by the individual estate tax exemption and the bulk of the assets within that estate pass to the surviving spouse, this can cause the surviving spouse’s estate to surpass the individual estate tax exemption limit so that the combined value of the estates of both the first-to-die spouse and surviving spouse are taxed when the surviving spouse passes away. A portability election allows a surviving spouse to use leftover exemption amounts from the first-to-die spouse so there is a chance that the surviving spouse’s personal exemption can be combined with the leftover exemption from the first-to-die spouse to shield the surviving spouse’s estate from the estate tax, too.

Beneficiary Forms and Estate Planning

Published on: April 20, 2017 | by Ettinger Law Firm

Understanding the different aspects of estate planning is a crucial part of creating a comprehensive estate plan that accomplishes your individual goals. For probate assets, many individuals utilize a Last will and Testament to direct the distribution of assets subject to probate. Non-probate assets, such as life insurance policies and assets held within a trust, are distributed upon death according to the mechanism for distribution contained within the asset and are usually directed by the nomination of a beneficiary. It is extremely important to remember beneficiary nominations when creating, reviewing, and revising your estate plan.

Common Beneficiary Pitfalls

One common beneficiary pitfall occurs with assets like bank accounts that often have a payable on death beneficiary option. With these options, a bank is directed to distribute assets within the account covered by that designation to the person listed as the payable on death beneficiary. This can cause unintended problems if your Last Will and Testament directs your bank assets to be distributed differently, and may result in an unintended Will contest that could jeopardize other aspects of your Will. Making sure that beneficiaries for these types of assets are properly aligned with other provisions of your estate planning documents is an important part of ensuring your wishes are carried out.

Rights to Life Insurance Policies and Retirement Accounts

Published on: April 20, 2017 | by Ettinger Law Firm

There are many estate planning tools that should be considered when writing a will. While the obvious includable provisions are for assets and property distribution, you should also consider how you want your life insurance policy distributed as well as any retirement benefit accounts. The policies you have subscribed to and pay premiums on will administer a life insurance policy or benefits as you have provided, however, many people forget to amend these policies when they go through events such as a divorce or if they lose a loved one.

Life Insurance Policies

Failing to update life insurance policies can end up benefitting a party you no longer intend to provide for, such as a former spouse who has since remarried, or a family member or friend you have been estranged from. Thus, it is certainly a good practice to amend and update your policy after a major event or to make sure it aligns with your wishes every few years. Making reference to the life insurance policy and the intended beneficiary in your will just goes to further support your claim to show whom you wish to receive the proceeds of policy.

Millennials and Estate Planning

Published on: April 18, 2017 | by Ettinger Law Firm

Estate planning can be an uncomfortable and confusing topic for many people. Nobody necessarily likes thinking about what will happen when they die. However, estate planning is an important activity for adults to consider, even those in their 20s and 30s. A recent article from USA Today highlights the need for millennials to consider estate planning as part of their plans as they move forward. In fact, the article cites a 2015 study that found more than 60 percent of Americans don’t have a will. This number likely includes a disproportionate number of millennials.

Responsible Financial Planning

Responsible, comprehensive financial planning doesn’t just involve being good with money. In the still-lingering shadow of the most recent recession and with an increased potential to carry large amounts of student loan debt, it isn’t uncommon for millennials to have a sense of the importance of treating money responsibly. However, while short-term money management can provide the foundation for a lifetime of financial stability, it is important to keep long-term financial planning in mind, too. Long-term financial planning includes the creation of a comprehensive estate plan that includes documents such as a Last Will and Testament, power of attorney, trust, and/or other related financial planning documents. As the article notes, these things are not just important for older adults – but for everyone.

Property and How to Plan For It With Your Estate Attorney

Published on: April 17, 2017 | by Ettinger Law Firm

How property and assets are distributed when you pass can be a sensitive topic that many people do not like to address, in fact, more than half of Americans die without a will every year. This failure to plan for the distribution of assets and property can leave many interested parties at odds and may not reflect what your last wishes were for your legacy. Depending on what you are leaving behind, there are some considerations that must be made regarding your assets.

Depending upon the state you reside in, your property may pass subject to probate or it may pass outside due to pre-documented rights of survivorship or trust language. If you live in a community property state, which means that all property acquired by you or your spouse during the marriage, regardless of who bought it is property of the marriage, then your property will pass subject to probate court. However, passing through probate may be avoided if you have left rights of survivorship language in your will or property ownership documentation. Property is then subject to the estate tax, which may not be the main concern of dissolution, depending on the assets involved.

Additionally, a trust can be set up that will either avoid probate or will continue to be includable in your estate. If you seek to avoid probate, you can form what is called an irrevocable trust, which allows you to put your assets and property in a trust, to be held and owned by the trustee, who works to administer the trust under the governing trust and also make decisions in the best interest of the grantor and any potential beneficiaries. However, if you wish to form a trust but still seek to maintain control of your assets and property by amending or revoking the trust during your lifetime, you can form a revocable trust.

Business Ownership and Estate Planning: Recapitalization

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

The estate planning process can be complex and confusing, which is one of the reasons it is a good idea to work with an experienced estate planning attorney as part of creating a comprehensive estate planning strategy. This is especially true for business owners. Recently, we wrote about some important estate planning considerations for business owners. One potential question many business owners may have when considering estate planning for their business is whether or not it is a good idea to remain in control of their business or transfer their business to their heirs.

When a business owner wants to remain in charge of their business, this can be a difficult question because transferring the ownership of a business can often mean transferring the management responsibilities of the business, too. While the answer as to whether or not remaining in control of your business is right for you depends on each business owner’s individual circumstances, one possible technique to consider is business recapitalization. Business recapitalization will allow you to separate ownership from management, and could be the right strategy for you.

Benefits of Recapitalization