nyc estate planning lawyer

IRS Rules Now Reflect Updated Same Sex Marriage Rulings

Published on: October 9, 2016 | by Ettinger Law Firm

New Department of the Treasury and Internal Revenue Service Final Regulations Now Reflect Supreme Court’s Obergefell v. Hodges and Windsor v. United States Rulings

On September 2nd, the final regulations that reflect the holdings of the Supreme Court rulings that upheld same-sex marriage laws around the country as well as Revenue Ruling 2013-173 were released to the public. The new terms in the regulations reflect the new descriptions of marital status of taxpayers for federal tax purposes.

A Brief History Lesson

Disinheriting Your Spouse? Not So Under New York Law

Published on: July 18, 2016 | by Ettinger Law Firm

You are always told that you can leave whatever assets you want in your will to whomever you want. After all it is your last will and testament. Your will represents your final wishes and they are to be carried out to the letter. You may be shocked to learn that in some cases under New York law that your will can actually be disregarded almost in its entirety, and that special case comes into play if you do not leave anything to your spouse.

Sacred Institution, Sacred Inheritance Rights

Marriage holds a special place in society and the laws of New York not only reflect that distinctive position but also protects the institution of marriage. Under New York’s Estate Powers and Trusts law section 5-1.1, a surviving spouse has the right to collect assets from a deceased spouse’s estate if the deceased spouse’s will either does not provide for the surviving spouse or does not give enough to the surviving spouse. It does not matter if the will has bequeathed those assets to someone else; the surviving spouse’s rights to the property trumps all others.

PROPOSALS TO LIMIT THE GENERATION SKIPPING TRANSFER TAX EXEMPTION

Published on: June 1, 2016 | by Ettinger Law Firm

PROPOSAL TO MOVE BACK TO PREVIOUS TRUST LAWS

As this blog discussed in the recent past, dynasty trusts are trusts that allow for a benefactor to pass wealth on to future generations via various legal mechanisms that allow a trust to carry on for literally hundreds of years, overcoming the traditional rule against perpetuities that limited trusts to a life in being plus 20 years, thereby ending the legal life of a trust essentially at about 90 to 100 years. In March, 2016 President Obama submitted a proposed budget that includes a provision that would effectively eliminate these state trusts at about 90 years.

Every year, the Department of Treasury prints what is called a green book which outlines proposals, which, among other things, contains suggestions that the presidential administration believes are needed and appropriate changes to the law, policy or other regulatory and legal matters. It also contains information regarding exceptions and issues that are unique to dealing with the federal government. Under President Obama’s proposal, as found in after page 190 in the green book, this would be done by eliminating the generations skipping tax exemption at 90 years from the date of its creation.

AMERICAN BANKERS ASSOCIATION – SAFE BANKING FOR SENIORS

Published on: May 16, 2016 | by Ettinger Law Firm

LARGE NEED TO REDUCE AND PREVENT FINANCIAL EXPLOITATION

The American Bankers Association is looking to serve a large market that is only getting larger by the day. At the same time, they are working to shore up the larger financial markets in a larger effort to prevent financial fraud perpetrated against seniors. As one banker noted during a speech on the topic, the banking community responded to the need to protect those with diminished ability to discern the difference between a real deal being sold by a legitimate vendor and a scam by predators. In February, 2016 it launched the Safe Banking for Seniors program, with various state bankers association across the nation rolling out their own version modeled on the American Bankers Association.

As of the inception of the program, 30 states joined in to help usher in the program. The New York Bankers Association is not one of the 30 states and does not currently such a program. Nevertheless, it is gaining popularity across the nation and many states bankers associations are seeing the utility and popularity of such a program. Furthermore, the program is not restricted to states bankers associations, individual banks, regional banks and bank chains can join in the program. As the American Bankers Association notes, 30% of the population of the country will be 60 or older by 2025. The Consumer Finance Protection Bureau and the American Bankers Association both note that $2.9 billion per year is lost to fraud perpetrated against elder Americans. Some estimates are as high as $36 billion per year, with only one in 43 cases of financial fraud against an elderly American properly documented and reported. The primary program is designed for banks and bankers associations, which will in turn filter down to individual elderly bank customers.

ABC TRUST PLANNING – WILL IT BE A BURDEN?

Published on: March 16, 2016 | by Ettinger Law Firm

NEW LAWS MEANS NEW RISK AND LEGAL OBLIGATIONS

President Obama signed into law the American Taxpayer Relief Act on January 2, 2013 which permanently raised the estate tax exemption and added an inflation index, such that it rises every year to account for inflation. Better still, the same law allows for spousal portability of estate tax exemptions, which this blog recently examined . The amount for 2016 is $5.45 million per person, $10.9 million per couple. This is a significant change from just 2008 when it was $2 million dollars and even as low as $675,000 in 2001 and $1 million in 2003 which was not that high considering that most people pay off their mortgage and probably have substantial retirement assets by the time they of retirement age.

For those amongst us who continue to work because that is part of their identity and not out of necessity, the $1 million threshold could easily be met. With the much larger $5.45 million exemption, less than .3 percent of estates in this country will met that threshold. So for all of those couples and individuals who planned on the much lower threshold your plans were likely well designed, but only under the then lower tax exemption. Now, with the much higher threshold and spousal portability, it is best to reexamine these estate planning documents. If one of the previous tools that you employed to insure lower tax liability was the AB trust also known as a bypass trust or even a family trust, it is likely that this will no longer serve you, your spouse, your estate or your heirs. Very briefly, depending on the size of your estate, it may no longer provide as great of tax relief as it once did and may unduly restrict your spouse by limiting their income, increase accounting costs, impose unneeded legal filing and generally complicate their life with other unforeseen complications that no longer serve their purpose.

IRS ART ADVISORY PANEL

Published on: March 14, 2016 | by Ettinger Law Firm

GOVERNMENT HAS BEST AT HAND – FOR FREE

Whenever a taxpayer submits tax documents that deal with a work of art or of cultural significance that is valued at least $50,000, according to the taxpayer’s own estimate, the IRS goes through a process by which it independently evaluates the items. The IRS has on hand the very best of the best when it evaluates art and cultural items. More specifically, it has the Art Advisory Panel of the Commissioner of Internal Revenue, which is composed of the very best of the best when it comes to art evaluation. Better still, at least from the perspective of the IRS, they are volunteers and only reimbursed for travel and related costs.

It is relatively easy to understand that they would evaluate paintings, such as Degas, Monet and Van Gogh or photographs from the likes of Matthew Brady, Edward Curtis or Dorothea Lange. But things such as collections of samurai swords, vases and other decorative items from Tang era China, and even doll collections also are considered. The panel may not have a very important sounding name, but they do wield considerable influence over particular tax cases. Any time a work of art worth more than $50,000 changes hand, is donated to charity or gifted, the government wants to know the true value of the property.

DISCRETIONARY TRUSTS

Published on: November 24, 2015 | by Ettinger Law Firm

PROTECT ASSETS FROM CREDITORS

The Domestic Asset Protection Trust is becoming more and more popular lately in various jurisdictions. Alaska created the first such law, effective April 2, 1997, with Delaware’s law going into effect on July 9, 1997. Since that time, 13 additional states adopted some form of an asset protection trust scheme. At least one of them, Hawaii, openly states in the very language of the law itself, that it seeks to create favorable laws to attract foreign capital and entice wealthy individuals across the United States and world to deposit a portion of their net worth in Hawaii for asset and trust protection and management. It is designed to increase the assets within Hawaii’s financial sector, increase tax revenues and position itself as a leading jurisdiction in financial management. There is little uniformity across the jurisdictions. Some jurisdictions, such as Delaware, carve out an exception for child support and separate maintenance of a separated or ex-spouse, while others, such as Nevada, has no exception for child support or separate maintenance creditors.

NEW YORK LONG ESTABLISHED PROTECTIONS AGAINST CREDITORS

FINE ART, ANTIQUES AND OTHER COLLECTIBLES IN ESTATE PLANNING

Published on: November 14, 2015 | by Ettinger Law Firm

SELL NOW OR PASS ON

The issue of how to deal with the collection of fine art that you amassed over the years should be dealt with now rather than allowing your heirs decide for you. Perhaps your heirs do not have any appreciation for your original Ansel Adams or Edward Curtis photo collections. If you view it as an investment, then timing your sale to maximize profit should be the most important criteria. Timing may not be right for several years or it may be right now. If you are looking to maximize profit which will only go to to your estate, you may consider waiting to pass it on. If, you happen to value your art collection because of its intrinsic artistic value, you have another set of criteria by which to make your decision. Perhaps you have a family member you know would appreciate it more than say your son or daughter. Perhaps you should sell it to insure that the artistic value continues to be appreciated. Country Living spotlighted an artistic marble collector who decided to sell his collection to insure that it would continue to be appreciated. In any event, Capital gains tax on collectibles, gift tax and estate tax, both state and federal, must all be considered.

ESTATE TAX