white plains estate plan

Owning Property Outside of a Trust Can Be Dangerous

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

Comprehensive estate planning is a lifelong process. There are always reasons to review and update your estate planning portfolio, including major life events life births or divorces. Not only does estate planning need to be a part of adjusting to major life changes, but the components of your estate plan can be used to protect your assets as well as those of your loved ones during these types of life events. However, one common pitfall of a comprehensive estate plan is when individuals own or acquire property outside of a trust. Doing so can result in unintended tax consequences as well as risk exposing your property to the probate process and/or creditors.

Property and Revocable Trusts

When you own property, placing that property in a revocable trust might be a good move for you based on your individual circumstances. Some benefits of a basic revocable trust include allowing assets within that trust, including property, to avoid the probate process. The probate process can be time-consuming and add unnecessary expense to settling an estate. It is also possible that placing assets like property in a trust will allow your family members to retain control over those assets if you are incapacitated to the point where a court may wish to appoint an outside guardian. Assets not within a trust are subject to probate and the potential loss of familial control in case of your incapacitation.

Preserving Real Estate Assets for Your Heirs

Published on: May 31, 2017 | by Ettinger Law Firm

Most people engage in comprehensive estate planning to ensure that the things they have worked for throughout their life can pass along to their heirs. Preserving your assets is an important part of ensuring that you are able to pass as many assets to heirs as possible. There are a variety of methods that allow you to successfully preserve assets in the face of major life events, if you are being pursued by creditors, or even from the financial costs of probate. It is of particular importance to make sure that high value assets, like real estate, are protected in these situations. Fortunately, there are several steps you can take to make sure that your real estate assets are able to be passed on.

Gifting

Perhaps one of the most common ways to protect real estate assets is to gift them to a friend or family member. You can either make an outright gift of the real estate or place real estate in a trust for a person. If you make an outright gift of real estate to another, you may be subjecting the transaction to the federal gift tax. However, the gift tax may ultimately be significantly less than the estate tax you could face if real estate you are gifting were to be included in your final estate valuation. An experienced estate planning attorney can help you understand both the federal gift tax and federal estate tax, as well as their state-level counterparts, to help you make more informed decisions about gifting high value and/or other assets.

Does a Crummey Trust Have a Place in Your Estate Plan?

Published on: May 29, 2017 | by Ettinger Law Firm

The popularity of trusts in estate planning has increased steadily over the last few decades. They are often excellent vehicles that can help people protect their assets and avoid excessive tax penalties related to such assets. One of the more traditional types of trust is known as a Crummey Trust. A Crummey Trust is a trust structured in a way that allows parents to make annual deposits to it within the currently established annual limit while allowing for beneficiaries to maintain a present interest in gifts. This trust has some features that might make it applicable to your estate planning needs.

Features of a Crummey Trust

A Crummey Trust allows individuals to use the annual gift tax exclusion while funding a substantial trust that a recipient cannot access until a certain age. As such, it requires the recipient to have what is known as a present interest in the trust. This means that the recipient has immediate access to funds deposited into the trust. In order for Crummey powers in a trust to adhere to this present interest, funds deposited to the trust are available for immediate withdrawal/use by the recipient for a reasonable period of time, such as 30 days after the gift has been made. Once 30 days has passed, the money automatically gets deposited into the trust where it will be protected until the age at which the recipient has been designated as having access to it.

Tips When Considering Estate Planning

Published on: May 25, 2017 | by Ettinger Law Firm

Comprehensive estate planning is an important part of aging, especially if you have already started a family. Estate planning for young families can be an unpleasant topic, but it is extremely important. Making sure that your heirs are provided for not only provides you with peace of mind, but also ensures that their needs can be met if you are not able to meet them yourself. When you begin to think about estate planning options, the following tips from a recent article in the Chicago Tribune can help you direct your energy and resources toward making the right decision based on your circumstances.

Make an Inventory of Your Assets

The first step in comprehensive estate planning is to figure out exactly what you are working with. You can do this by making a list of all of your assets so that you can see exactly what you have to leave to your heirs. Make sure to include everything: cars, checking accounts, retirement plans, digital property, trademarks you may own, jewelry, clothing, and any other assets you may have. This will give you an idea of how complicated the estate planning process might be for you and can help you determine which estate planning strategies might work best for you. You will also need to start thinking about who you would like these various assets to go to as that may have a significant impact on the types of estate planning strategies you ultimately engage in.

Tips for Avoiding a Will Contest

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

Comprehensive estate planning can be a confusing process. It can be even more confusing with larger estates or with multiple children. Parents want to ensure that their estate plan provides for their children’s financial security, but in circumstances where children may be in different financial situations or a variety of characteristics may impact how parents elect to distribute their assets estate planning is an important part of avoiding a fight over the estate plan down the line. The following tips, adapted from a recent article from Forbes about circumstances that often combine to lead to fights over estate plans, can help you prepare your estate plan in a way that avoids fighting over it among your heirs. In preparing your estate plan cautiously and planning to avoid potential fights between heirs, you can ensure that more of your assets are preserved for your heirs and that their relationships do not have to face the test of a legal challenge to your estate plan.

Include a No Contest Clause

One of the most direct ways of avoiding potential fights over your ultimate decision in how you wish to distribute your assets to your heirs is no work with your estate planning attorney to include a “no contest” provision in your Last Will and Testament. Doing so allows you to notify heirs that anyone that chooses to contest the Will stands to inherit nothing should they try to contest the validity of the Will through legal channels and lose. The mere existence of this type of clause can discourage individuals from fighting over the provisions of your estate plan.

IRS Allows Trust Modification Without Forfeiting Exemption

Published on: October 13, 2016 | by Ettinger Law Firm

A Recent Private Letter Ruling By The IRS Concluded That A Modification To A Faulty Fiduciary Provision Did Not Result In A Loss Of The Trust’s Grandfathered Generation Skipping Transfer Exempt Status

The taxpayer who submitted the modifications to the inter vivos trust for an IRS private letter ruling found himself bound a set of unfortunate circumstances. Due to the requirements of the successor trustee and appointment provisions and distribution requirements under the terms of trust, future trustees could not be appointed and distributions could not be made to the beneficiaries of the trust. Essentially the terms of the trust had frustrated the purpose of the trust. The beneficiaries were not benefiting from the corpus of the trust and the future of the trust was at risk.

Satisfying Treasury Regulations

Back To Basics: Where To Keep Your Estate Plan

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

You have finally done it; you took the necessary and important step to sit down and put together an estate plan with a qualified New York estate planning attorney. You have all of the necessary documents you need to move forward confident into the future about how your assets will be managed and distributed. You have gotten over the biggest hurdle that a majority of Americans never address but now you are faced with a trivial but important matter: where do I keep my estate plan?

Location, Location, Location

Where you store your estate plan matters. As we have written about before, failure to locate the documents in your estate plan at the necessary time could end up with them being treated as if they did not exist at all. Having your wishes written down somewhere that no one knows about does no one any good. Estate planning documents like wills serve an important evidentiary purpose for the courts as they are written proof of your final wishes. No court will probate a will that you cannot find and no hospital or financial institution is going to respect a Power of Attorney if they cannot see and examine the documents themselves.

HOW TO HELP YOUR EXECUTOR

Published on: May 24, 2016 | by Ettinger Law Firm

CHOOSING THE RIGHT PERSON AND STEPS TO TAKE

As noted in a previous blog, being an executor of an estate can be a thankless job. There are ways, however, that can allow you to make the job and life of an executor easier and less painful. It is a job that carries with it much responsibility, so taking a few proactive steps may help to save the executor a lot of heartache. One of the first steps you need to do, even before helping a named individual is to name the individual. In other words, pick the right person; in fact it is even better to pick a few individuals as successors in the event that the executor passes away before you or is otherwise unable to serve as the executor of your estate. Even better is to pick two people who will serve as co-executors; if you do this, you must make someone the primary person who shall serve and who has the final authority to make whatever decision needs to be made in the event that there is a disagreement.

It is important to keep in mind that the person you chose is going to in charge of your assets that you amassed throughout your life. All other things being equal, it is best to have someone who lives local and in the same state as you. Few things in life provide such a stark choice. It may be more important to you and the heirs, however, that you pick someone who is familiar with you, your wishes and your assets, even if they live further away or in a different jurisdiction. If you choose a professional, such as an attorney, it is important to keep in mind that there will be costs associated with this. If you permit and allocate a specific payment structure into the will or testamentary trust, it may not matter, since even a family friend or relative may also be entitled to a fee. Finally, it is best to speak with that person in advance to ensure that they understand that they are being named as the executor of your estate and that they will do so.

HOW TO ASSURE AN ESTATE BATTLE

Published on: April 11, 2016 | by Ettinger Law Firm

HUGUETTE CLARK AS EXEMPLAR

The last member of the gilded age passed away just a few years ago. Huguette Clark’s life, in some ways, seems to mirror the classic Orson Welles classic

One of the first things that she did to insure an estate battle was to pass the entirety of her estate via a will. While the larger family itself may have created various trusts for family members to pass on the overwhelming wealth, Ms. Clark herself chose to pass her wealth via a will. While it is alleged that Ms. Clark’s attorney and accountant had something to do with these limited and financially irresponsible decisions, Ms. Clark did not create a trust to ensure the passage of her large and very valuable art collection to charity, which included a painting by Monet, valued at at least $25 million as well as a Picasso worth over $31 million.