fishkill elder law attorney

The Role of a Trustee and Their Discretionary Power

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

Trustees serve a very important role in the effective administration of a trust. The maker of the trust document, the grantor, gives another neutral third party, the power to administer the terms of the trust throughout the lifetime of the grantor and after, if the terms of the trust provide so. The trustee is essentially in charge of managing all the assets of the trust, without taking an interest in them. While a trustee can also be the maker of the trust, many people elect another individual, or a corporate trustee to continue administering the trust upon their death.

There are some express terms that a trustee must follow, such as:

Keeping separate the investments and accounts of the trust,

SPECIAL NEEDS, THIRD PARTY AND SELF SETTLED TRUSTS – WHATS WITH ALL THE NAMES?

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

LEGAL DISTINCTIONS THAT MATTER

When a person applies for Medicaid eligibility there are many pitfalls that an unsuspecting or unsophisticated applicant can run afoul of. To help them retain the benefit of certain monies that they would normally have access to third parties or the applicant themselves can create a special needs trust to help keep the public benefits and still benefit from the money in the trust. The various different trusts have different legal requirements that must be met to qualify as that type of trusts.

Moreover, different trusts accomplish different goals and yet other types of trusts exist that have nothing to do with Medicaid or other public entitlement program eligibility but help to reduce tax liability. Some trusts accomplish two tasks, such as a third party special needs trusts, which allow seniors to live a relatively modest and respectable life and qualify for Medicaid at the same time. While other types of trusts only satisfy just one legal goal, such as a grantor retained annuity trust, which allows a person to make a gift of an asset that will likely appreciate rather quickly, but incur no gift tax liability. Finally, there are other types of trusts that outlive their utility, such as pooled trusts.

FEDERAL TAX EXEMPTION FOR ELDERLY DEPENDENTS

Published on: February 3, 2016 | by Ettinger Law Firm

EVERY LITTLE BIT COUNTS

For those of among us who care for elderly parents or relatives, you do it without expectation of compensation or reimbursement. You dedicate time, money, resources and do it day in and day out and will continue to do so without concern for recompense. That does not mean, however, that you would not take any financial reimbursement from outside companies or or tax exemptions from the IRS. Most people do not realize that caring for an elderly parent or relative comes with some fairly generous tax benefits. There are some very important and precise legal definitions that need to be satisfied before you can properly claim your elderly relative dependent.

TAX LAW DEFINITIONS AS QUALIFYING DEPENDENT

FILE AND SUSPEND STRATEGY IS NO MORE – NEED TO REASSESS PLANS

Published on: January 26, 2016 | by Ettinger Law Firm

For over a decade it was sound and perfectly legal advice for financial advisors and elder law practitioners to advise their married clients to file and suspend their social security benefits, thereby maximizing their financial returns. The basic advice was to advise a married couple to have the spouse who earned more through his/her lifetime to file for social security benefits at the full retirement age. After the higher earning spouse filed, the lower earning spouse would automatically be eligible for spousal benefits and would therefore file for spousal benefits. Once the lower earning spouse started to receive benefits, he/she would get a higher monthly benefit amount as the lower earning spouse would piggyback on the higher earnings of their spouse.

At that time, the higher earning spouse would suspend their benefits and work, thereby increasing their social security benefits even more, so that way when they hit the maximum benefit age now set at 70 they would have a higher monthly benefit amount. When the higher earning spouse hit the maximum benefit age, they would have maxed out their social security earnings and have already benefitted from a spouse who collected social security benefits in the meantime. It all comes down to dollars and cents. Someone has to crunch the numbers to determine if it made sense for the couple to do it, although for the majority of couples it did make sense.

The question also had to be asked, when was the optimum time? Again, someone had to crunch the numbers to find the sweet spot. There was even a second strategy for those whom it did not make sense to do so. The second approach was for both spouses to file a “restricted application”, whereby each spouse would only receive their spousal benefits. This let them increase their own earnings, so that way when they reach seventy, they have maximized their social security benefits. In either event, the couple would be able to benefit from an additional several thousands of dollars.

HOW LONG CAN IRS COME AFTER ME? THE SUMNER REDSTONE CASE

Published on: January 2, 2016 | by Ettinger Law Firm

Sumner Redstone is an entertainment business mogul with a majority share ownership of CBS entertainment and Viacom, and through Viacom, BET and Paramount Pictures, all through his majority ownership of his family business, National Amusement, which originally started out in the drive in movie theater business during The Great Depression. In just the last few weeks a case against Mr. Redstone by the IRS presents an oddity in the law, which may make many people shutter. More particularly, the IRS issued a Notice of Deficiency for a taxable event from 1972 – over 40 years later.

The nature of the case revolved around a transfer of shares in National Amusement Corporation in 1972 to separate trusts set up for the grandchildren of the founder, Sumner Redstone’s father Michael Redstone. Sumner set up one trust for his kids while his siblings set up separate trusts for their kids. At the time the transfer of interfamily stock was of a insignificant amount that passing them from personal ownership to a trust did not even require a tax return. One can and should ask about the concept of a statute of limitation.

Apparently, as the case against Mr. Redstone shows, the IRS does not have a statute of limitation for unfiled tax returns. 26 U.S.C. § 6501(c)(1) establishes that when a taxpayer files a fraudulent tax return, (c)(2) otherwise attempts to avoid tax liability, or (c)(3) fails to file a tax return, there is no statute of limitation. Mr. Redstone has an impressive educational pedigree, where he graduated from first in his class from the Boston Latin School and then graduated Harvard in only three years in 1944, which was actually common at the time. After graduation he served as an officer in the United States Army, helping to decode Japanese messages. He attended Georgetown Law School after the war and then received his LL.B. in 1947 from Harvard Law. After working for various governmental departments followed by private practice, Mr. Redstone went to work for the family business, which was booming by then.