Estate Planning

May 21, 2011

Now Remains a Good Time for Baby Boomers to Conduct Estate Planning

A New York estate planning lawyer knows that there is never a bad time to prepare and plan for your financial future. Some area community members, however, don’t begin to seriously consider seeking estate planning help until their mind turns toward retirement. Busy New Yorkers often figure that they can push off asset planning until sometime down the road.

However, as a recent study summarized in the Journal of Accountancy this month explained, the previous retirement plans of many aging residents have recently changed in light of the national economic climate. Many baby boomers are finding themselves in situations that they did not expect. A survey of CPAs noted that nearly 80% had clients whose retirement has been delayed because of economic concerns. About a third of those individuals are expected to work an additional three years, another third an additional four to six years, and the remaining third even longer.

However, regardless of the changing work and financial situation of many area residents, there is no reason for local baby boomers to put off contact with a New York estate planning attorney. The benefits of talking with a professional in this area and learning about the options available to you remain striking.

Categorized as those born between 1946 and 1964, baby boomers represent roughly 77 million Americans or 37% of the nation’s population. This year marks the first time when some of that group of citizens will turn 65 and begin to retire. However, as this study demonstrated, the financial situation of many seniors in this group remains complicated.

One individual involved in the research explained, “Boomers have been scarred by the economic turmoil of the past few years and face complex challenges going forward.”
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May 19, 2011

Not All New York Elder Law Attorneys Are Alike

by Ettinger Law Firm

Many seniors know that they need to get in touch with a New York elder law attorney to help update and handle matters related to their estate. Yet much of the actual work that those lawyers do is shrouded in mystery to the average community member. Some believe that it all has to do with filling in the blanks of certain legal forms. That often leads to the assumption that all elder law attorneys are capable of doing essentially the same quality of work. Nothing could be further from the truth.

It is imperative that all planners ensure that they work with experienced New York estate planning lawyers to avoid common pitfalls in the process. Only the best practitioners in this area are aware of all options available to a client to best protect their assets and ensure that their wishes are carried out. The law changes often at both the federal and state level–it is your attorney’s job to know those changes and advise you on its potential impact on your situation.

Besides keeping abreast of updates in the law, your attorney must also have the practical skills to explain to you how certain future events may affect the estate. Careful planning and strategizing is important in these matters. For example, there may be no easy answers when it comes to how many assets to place in a wife’s name or trust to offset a husband’s IRA assets. There is a tendency among some attorneys to place too many assets with a wife, while ignoring the practical reality that the husband’s life expectancy is lower. This mistake may then results in no estate tax savings. Only the most experienced attorneys would be capable of understanding these possibilities and ensuring that you have all the options on the table when making your plan.
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March 11, 2011

Surviving Spouse’s Use of the Home in Second Marriages

by Ettinger Law Firm

A common provision in wills and trusts, where one of the couple in a second marriage owns the marital home, goes something like this “My surviving spouse shall have the right to reside in the home for so long as he/she desires, provided he/she pays all taxes and insurance premiums thereon and shall maintain the premises in good order and repair. Upon his/her vacating the premises, the same shall be sold and the net sale proceeds distributed to my children in equal shares, per stirpes.”

Sounds fair, doesn’t it? After all, the surviving husband or wife gets to live in the house as long as they like, rent-free, subject only to payment of the carrying charges. In practice, however, the plan carries a significant defect. It puts the surviving spouse in a “Catch 22”. If they find the house is too large, too difficult or too expensive to maintain they have the choice to leave, but then face the prospect of a significant expense to purchase another residence out of their own funds or, in the alternative, the cost of rental which may add thousands of dollars in monthly outlay.

For this reason, we recommend that the surviving spouse gets not only the use and enjoyment of the home for life, but also the use and enjoyment of the proceeds of sale of the home for life, to either purchase a smaller home or condo or use the income from the sale of the home to pay for a rental apartment. In our view, the children of the previous marriage lose nothing. The surviving spouse could have lived in the house for life so why not give him or her the flexibility to trade down as they get older? If there are excess sale proceeds, these can be invested to provide additional income to the surviving spouse. The co-trustee, perhaps the attorney as previously suggested in these pages, makes sure the funds stay intact for the deceased spouse’s children after the second spouse dies.

March 1, 2011

Prenuptial Agreements

by Ettinger Law Firm

by Michael Ettinger, Esq.

Prenuptial agreements (“prenups”) are contracts entered into by a couple before marriage setting out the rights of the parties in the event of divorce or death. Less common is the postnuptial agreement, with similar terms, but executed by the parties after marriage.

Who signs these types of agreements and why? Often couples marrying for the second or more time will have children and/or substantial assets at the time of remarriage. They may wish to insure that all or some of their assets go to their children and not to the new spouse, who may have children and assets of their own. Even with a will which leaves everything to one’s children, without a prenup the surviving spouse is legally entitled to claim about half of the deceased spouse’s estate. Having been married before, these couples know that sometimes things do not work out and wish to simplify matters in the event of a divorce, including whether or not alimony will be payable.

February 21, 2011

Life Insurance Audits

by Ettinger Law Firm

by Michael Ettinger, Esq.

Let’s face it, life insurance is a mystery to most people. Few know whether they have the best insurance for the money.

Here are some changes that may require you to review what you have.

February 11, 2011

“Nice” Lawyer Costs Family $300,000.00

by Ettinger Law Firm

by Michael Ettinger, Esq.

A couple came in to see me today for the husband’s 88 year old father who is a nursing home in Florida. They now wish to bring him up to New York to be nearer to the family. He has about $600,000 in assets, including his home.

They told me about the very nice lawyer he has down on the west coast of Florida, who set up a revocable living trust for Dad and for Mom who died last year, in February of 2006, and amended it in March of 2010.

January 27, 2011

1585 Points of Contact

by Ettinger Law Firm

by Michael Ettinger, Esq.

We were thinking the other day about what typically happens when a client signs a will. After the will signing, the client often fails to ever look at the will again and the lawyer may never contact the client again either.

Now, let’s say this particular client dies thirty years later. The old will is trotted out and, lo and behold, the executor is some very elderly or deceased sibling and the beneficiaries are quite different from what the deceased would have wanted thirty years later. Not to mention that by only having a will, not being a plan for disability or nursing home protection, this client may have died penniless, having spent down all of their assets to pay for long term care.

January 21, 2011

Recent article in Investor’s Business Daily, provides 10 steps for picking a financial adviser.

by Ettinger Law Firm

Investor Business Daily reports, “Choosing a financial adviser can be akin to a stroll through a minefield. If you don’t prepare, your wealth could get blown up by a Bernie Madoff or wounded by someone whose skills are mediocre or simply not suited to your needs. But with proper preparation, chances are you’ll find one of thousands of advisers who can help you set and achieve your goals.”

Meeting with a prospective adviser to understand how they get compensated for their services as well as determine your comfort level with that individual is essential. Addition insight into an adviser can be found in promotional materials, websites and professional certifications. You may also look up an adviser’s Form ADV, which lists complaints and disciplinary actions, online with the Securities and Exchange Commission or your state regulators.

A New York Estate Planning attorney would be a good referral source for a qualified financial adviser.

December 20, 2010

How Disclaimer Trusts Work

by Ettinger Law Firm

by Michael Ettinger, Esq.

Commonly used in estate planning today, disclaimer trusts allow the surviving spouse great flexibility in optimizing estate tax savings.

Here’s how they work. Each spouse sets up their revocable living trust. Husband and wife are co-trustees of his trust, using his social security number and, similarly, they are both co-trustees of her trust with her social security number. Let’s say husband dies first. His trust says “leave everything to my wife except that, whatever she disclaims, i.e. refuses to take, will remain in my trust. The disclaimer is a legal document that lists the assets disclaimed and their value. Wife remains as trustee on husband’s trust after he dies and may use the funds in his trust for her health, maintenance and support. She may also remove 5% of the trust every year for any reason or $5,000, whichever is greater.

December 13, 2010

10 Tips for Helping Families with Special Needs

by Ettinger Law Firm

by Peter Lennington, Esq.

This post by American Association of Trust, Elder Law and Estate member, attorney Peter Lennington, examines the unique planning requirements of families with children, grandchildren or other family members with special needs including the establishment of Special Needs Trusts.

COSTLY MISTAKE #1: Disinheriting the child.