New York Estate Planning & Elder Law Blog

INTELLECTUAL PROPERTY IN ESTATE PLANNING

Published on: October 29, 2015 | by Ettinger Law Firm

Intellectual property is an umbrella term that includes several different specific areas of the law. Trademark law, patent law, copyright laws and trade secret laws are all examples of intellectual property laws. The constitution guarantees that the federal government has exclusive jurisdiction over patent and copyright laws. Patent and copyright laws are designed to “promote the progress of science and useful arts.”

COPYRIGHTS, OWNERSHIP, HEIRS AND ESTATE PLANNING

Copyrights created after 1978 are generally good for the life of the author plus 70 years. When written for a corporation, so called work for hire copyrights, the copyright is valid for 95 after first publication date to 120 years after the work is created. To pass a copyright on to heirs, you must be careful to do it the right way. If a painter passes a painting on to an heir the right to control the copyright of that painting does not necessarily follow. The painter will have only passed on the original painting. To pass a copyright, the trust, will or other document must specifically mention that the copyright to the painting passes to the heir. It is entirely possible for a painter to pass the original work to a friend or partner but pass the copyright on to another person.

Back to the Basics – Probate Administration

Published on: October 25, 2015 | by Ettinger Law Firm

The death of a loved one is an especially traumatic event. Lives can be upended and surviving family members and friends can be left feeling lost and confused about how to carry on. This is especially true when the death occurs suddenly or under tragic circumstances. Unfortunately, the law does not provide grief-stricken family and friends much time to mourn their loss before important work must be done. This important work involves admitting the deceased’s estate to probate and then administering that estate.

In New York and elsewhere, an individual who dies with a will or similar document in place is said to die testate. If a person does not have such a document in place, the person dies intestate.

Dying Testate: If the deceased left a will, the first step of administering the estate involves probating the will, or proving the will’s validity. Usually this involves simply introducing the will into the appropriate court. Once the will has been probated, the executor or administrator named in the will is tasked with carrying out the wishes of the deceased as expressed in the will, settling any lawful debts the deceased must pay, and providing an accounting or report to the court showing that the deceased’s assets were dispersed according to the terms of the will.

Health Care Power of Attorney Good Planning Tool for Seniors & Singles

Published on: October 19, 2015 | by Ettinger Law Firm

News reports reveal that America is increasingly becoming a nation of single people. For adults navigating life solo, careful planning about who will make health care decisions on their behalf in the face of unforeseen, incapacitating illness is a smart decision, especially for singles who are childless, have minor children and/or are estranged from their families. One available option is an advanced directive called a Durable Power of Attorney (DPOA) for health care. It allows singles to appoint an agent to step in and carry out their wishes when they are unable to make critical medical decisions for themselves.

Most states have enacted advanced directives legislation. This contract allows a person, called a principal, to designate to a selected agent the power to make decisions about the course of medical care should the principal become incapacitated. Decisions covered by a DPOA for health care include such things as the power to consent to or withdraw treatment for physical or mental conditions, or to determine when to initiate or terminate life-sustaining treatment.

Health care DPOA gives singles autonomy

Using Beneficiaries as Part of Your Estate Plan – Part II: Considerations

Published on: October 13, 2015 | by Ettinger Law Firm

An earlier post on this blog provided an overview of using beneficiary designations as part of your estate plan. Recall that beneficiary designations are a way to transfer property automatically upon the death of the asset owner outside of the probate process. This post is part II of that discussion, and include some of the pros and cons of using beneficiary designations, as well as a few special considerations related to certain forms of beneficiary designations.

Pros and Cons of Using Beneficiary Designations

Beneficiary designations can be a simple and effective mechanism to transfer your property in much the same a will or trust distributes your property. The advantages of beneficiary designations include the ease in which it can be set up and the speed and in which the beneficiary receives the asset. Also, the owner of the asset has flexibility to designate any of combination of shares to any number of primary and contingent beneficiaries. Beneficiaries may be individuals, trusts, charities, or the property owner’s own estate by way of its personal representative.

Early Withdrawals from Qualified Retirement Plans

Published on: October 8, 2015 | by Ettinger Law Firm

Are you not quite at retirement age, but in need of early access to your qualified retirement plan account? If you are not close to retirement, are you thinking about taking a withdrawal or loan from your qualified retirement plan account to help out with the care of your aging parents or relatives? Whatever the reason may be, whether you will be able to withdraw or borrow funds from you qualified retirement account before the age of 59 ½ depends on the rules contained in your specific qualified retirement plan. Many qualified plans allow you to borrow up to one half of the fund balance as a loan, which you will typically have to pay back within 5 years at a modest interest rate to cover your loss of investment growth. An early withdraw will generally trigger tax penalties under the Internal Revenue Code (“IRC”) and leave you with a hefty tax bill, including a 10 percent penalty on the early withdrawal. You can avoid the 10 percent penalty in a variety of situations, including the following common circumstances.

Rollovers. Under section 72(t)(1) of the IRC, rollovers from a qualified plan or individual retirement account into another individual retirement account within 60 days from the date of the withdraw will not trigger the 10 percent penalty tax.

Beneficiary Distributions. If the owner of a qualified retirement plan or individual retirement account passes away, section 72(t)(2)(A)(ii) of the IRC provides that the penalty shall not apply if the distribution is to a beneficiary.

Distributions from Special Needs Trusts

Published on: October 2, 2015 | by Ettinger Law Firm

If you have included a special needs trust as part of your estate plan, you need to know the importance of making sure the distributions from that trust are permissible per the terms of the trust and do not defeat the purpose of the trust by affecting eligibility for needed government programs.

Effect of Distribution

A special needs trust is one way to supplement the needs of a disabled loved one without compromising eligibility for means-tested government benefits, including Supplemental Security Income and Medicaid coverage. With respect to means-tested programs, federal law will require a reduction in benefits to the extent the beneficiary receives income or assets are otherwise made available to the beneficiary. For example:

Who will Manage Your Affairs in the Event You are Incapacitated?

Published on: October 1, 2015 | by Ettinger Law Firm

No one likes to consider the fact that they may one day need help in managing their affairs, but the fact remains many people will need a fiduciary they can trust to act on their behalf when incapacitated. Typically as part of an estate plan, an individual will execute a power of attorney appointing one or more individuals of their choice to manage their health care decisions and financial matters in the event they can no longer handle their own affairs. Powers of attorney can vary in scope and purposes, and can serve as one method to avoid judicial intervention, including guardianship or conservatorship proceedings.

Guardianship Proceedings

When a health care or financial power of attorney are not sufficient or absent from an estate plan, a guardianship or conservatorship proceeding may be necessary to appoint someone to represent the person suffering an incapacity. In New York, a proceeding for guardianship can be commenced by a variety of parties, including, a distributee of the incapacitated person’s estate, certain fiduciaries, an interested party concerned with the welfare of the individual, or the incapacitated person himself. Incapacity is determined by clear and convincing evidence that the individual is unable to manage their own affairs and is unable to understand the consequences surrounding their inability in such a way that will likely cause harm to themself or others.Courts will consider a variety of factors when selecting a guardian, including the incapacitated person’s specific needs and the capabilities of the proposed guardian in meeting those needs.

Back to the Basics – Demystifying Probate

Published on: September 27, 2015 | by Ettinger Law Firm

Are you being told to avoid probate at all costs? The probate process is characterized as a long and tedious process of endless red tape and expense. In many cases avoiding probate can be a worthwhile goal; however, a closer look at the probate process may reduce the angst that is often associated with a sometimes inevitable end to the best laid plans.

Some Basic Vocabulary

If you have been exposed to the probate process in some capacity in the past in connection with a deceased relative or friend you may have had heard some terms not often used in everyday life. Here are a few basic terms you should know:

Establishing a Charitable Trust as Part of Your Estate Plan

Published on: September 25, 2015 | by Ettinger Law Firm

Trusts can be used as a useful tool in your estate plan to accomplish a variety of goals. One example is establishing a split-interest charitable trust. These charitable trusts are an irrevocable trust established for a charitable purpose of your choosing, while at the same time featuring a benefit to a non-charitable trust beneficiary. In addition to tax benefits received under federal law, charitable trusts offer the person establishing the trust, also known as the “settlor,” a controlled process to effectuate their gift to a selected charity. Examples of charitable trusts include a charitable remainder annuity trust (CRAT), charitable remainder unitrust (CRUT), and a charitable lead trust (CLT).

CRATs, CRUTs, AND CLTs

Establishing a charitable remainder annuity trust includes the transfer of property to a trust that first distributes a fixed annuitized portion of the trust property to non-charitable trust beneficiaries, followed by a distribution of the remainder to the tax-exempt charity selected by the settlor. Similar to the charitable remainder annuity trust, a charitable remainder unitrust also includes the transfer of property to a trust that first distributes an annuitized portion of the trust property to non-charitable trust beneficiaries, followed by a distribution of the remainder to the tax-exempt trust beneficiary; however, the amount of the annuity fluctuates with the value of the trust assets. A charitable lead trust differs from the charitable remainder annuity trust and charitable remainder unitrust in that the settlor will designate that the charitable beneficiary will first received a distribution of trust assets at least annually for a set period of time, after which the non-charitable trust beneficiary will receive the remainder of trust property. Each of these three split-interest charitable trusts offer dual benefit to a designated charitable purpose and the settlor’s non-charitable trust beneficiary.

Dealing with Personal Property in Your Estate Plan

Published on: September 18, 2015 | by Ettinger Law Firm

When you create an estate plan, you face many decisions. One of those decisions will be how you should divide and distribute your property. You will spend a great deal of time deciding who will get what upon your death. One area that may need special attention is the distribution of your tangible personal property, especially those items that may not have significant monetary value, but may hold substantial sentimental value to you and your loved ones.

What is tangible personal property?

Under New York law, property is anything that may be the subject of ownership. The property specifically devised by your will or trust commonly includes real property, cash, stocks, motor vehicles, and other items of value you wish to pass on to those named in your will or trust. It is a good idea to define what you mean to include as part of your tangible personal property, which typically excludes cash, securities, and tangible evidence of intangible property. Generally, tangible personal property will include property, other than real estate, whose value is derived from the item itself, or its uniqueness, such as furniture, decor, jewelry, coin collections, photos, and other personal items you use in daily life. While you may consider your pets as members of your family, the law classifies pets as tangible personal property.