Estate Planning

October 25, 2015

Back to the Basics – Probate Administration

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.

October 23, 2015

Power of Attorney Should Complement Your Will

by Ettinger Law Firm

Making the decisions about your estate plan can be a daunting task. We are faced with a plethora of uncertainties and questions about our future and what to do about our “stuff.” There are a few documents that a client should consider executing with an attorney to protect their estate. One document called a Power of Attorney, that often complements a Will, can be overlooked by a client.

Understanding the Legal Document

A Power of Attorney typically comes in three fashions: a General Power of Attorney, a Specific Power of Attorney, and a Durable Power of Attorney. The distinctions are subtle, but extremely important. A General Power of Attorney allows a client to give authority to someone else to make decisions on anything that the client herself could make, such as financial and/or property decisions. The client is known as the “Principal” and the person that the client gives the power to is known as the “Agent.” In a very simple way, the Agent acts on behalf of the Principal in certain capacities, such as writing a check or selling a property.

October 7, 2015

Planning for the Succession of Your Small Business

by Ettinger Law Firm

A recent Forbes article reported that while most family business owners do have estate plans, many do not update their estate plans regularly. Many circumstances can change over just the course of a few years, which makes a regular review of any estate plan necessary in order to capture planning opportunities and evaluate risk. For small business owners, it is also a good way to review their family business succession plan, which can help ensure the continuity of their business assets, manage tax liability, and avoid dilemmas that typically occur in closely held family enterprises.

Business Succession and Estate Planning

For many family business owners their business not only represents their greatest source of wealth, it represents a heritage and opportunity for the next generation. As such, family business owners have a strong motivation and obligation to plan for the transfer of their business assets. By not implementing a business succession plan, the value created over so many years will be at risk. Depending on the size of the business and other sources of wealth, failing to plan over the long term can create a greater potential for estate tax liability and put the family business at risk in the event of an unplanned transition. For these reasons, family business owners should create and continuously monitor a business succession strategy as part of their estate planning process.

September 27, 2015

Back to the Basics – Demystifying Probate

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:

September 15, 2015

Making College Savings a Part of Your Estate Plan

by Ettinger Law Firm

Saving for the cost of your child’s or grandchild’s college education can be intimidating. Participating in a qualified tuition program, also known as a 529 college savings plan, that is administered by the State of New York can be an effective part of your estate plan, and a great way to save for college tuition.

What is a 529 Plan?

When you (the “participant”) enroll in a 529 savings plan, you open a special account with the sponsoring state program. This account is a tax-advantaged account that helps you pay for your designated beneficiary’s qualified higher education expenses, including tuition, fees, room and board, and required books.

September 12, 2015

Back to the Basics – Avoiding Disputes Over Your Estate

by Ettinger Law Firm

Without you around to clarify your testamentary intent, those receiving property, and likely those intentionally omitted from your will, might battle over your estate for years. There are many potential sources of dispute, but there are steps you can take to make sure your intent is carried out without an ongoing legal battle after you pass on.

Common Sources of Dispute

One child may have received more financial help over the years while the decedent was alive, and the will or trust does not take into account this prior assistance, which may leave the other children or beneficiaries with a sense of unfairness.

September 9, 2015

Now That You’re Dead, Don’t Forget to do Your Taxes

by Ettinger Law Firm

Age-old wisdom tells us that only two things in life are certain – death and taxes. Well, when it comes to dying in America, you can be certain that when you die, you also have to do your taxes. After all, if you earn money, you must pay taxes on it. And just because you choose to die, does not mean the IRS is going to let you get out of paying your taxes. Obviously there are exceptions that should be discussed with a local New York estate-planning attorney, but as a general rule, an estate must file a final tax return following final administration. There are 3a couple IRS publications that will aid in filing a final estate return.

Publication 17 – Who Should File?

As an initial matter, decedents are considered the same as regular taxpayers in some respects. For one, they only have to file if they meet the basic requirement of income. So an elderly person who has little or no income may not have to file. Publication 17 provides several tables that can assist with this. In 2014, single filers over the age of 65 who made less than $11,700 did not have to file. For married filers who are both over 65, the amount is $22,700.

September 7, 2015

Dealing With Lost Wills

by Ettinger Law Firm

Some clients may ask, “what happens if we lose the original will; is the court still going to let it be admitted to probate?” The short answer is, as always, maybe. As a general rule of thumb, New York courts are very reluctant to admit a copy of a will. If the original is lost, there is a presumption that a copy may not be the true will. It could be outdated, older version of the testator’s wishes. Maybe the original will was destroyed, and the person presenting the copy is trying to defraud the estate. These and more are just examples of concerns that judges may have. However, there are proactive steps that can be taken early in the estate-planning process to avoid this unfortunate complication.

New York Law Does Allow Lost or Destroyed Wills to be Admitted

Under Section 1407 of the New York Code, the following things must be shown in order to admit a lost or destroyed will to probate.

September 4, 2015

Several States Take the Lead on the Secure Choice Pension Initiative

by Ettinger Law Firm

For the last two decades, employers across the country have watched pensions go the way of VHS cassettes and tube televisions. Even many state governments are now doing away with bloated pensions and instead offering self-managed 403(b) accounts that allow employees to invest their own money in retirement. The argument often says you can take control of your money, be in charge of how your money is spent, maximize growth potential, and transfer your earnings time and again throughout your career, no matter how many times you change employers. But what of the millions of Americans who have neither – no pension nor 401(k) or 403(b) options?

White House Support

Recently, the Obama administration released its plan to support a new Secure Choice Pension Initiative. This plan, which is being spearheaded by California and Illinois, promotes employees of small businesses being offered a self-managed IRA that allows for payroll deduction. Notwithstanding several concerns about employer compliance with ERISA, it sounds like states may be moving toward making this a reality, and with the White House claiming it wants to see this in place by 2017, it may be coming to a state near you soon.

September 2, 2015

Multi-State Probate: What, Why & How?

by Ettinger Law Firm

Few things are as dreaded as probate. This is especially true for wealthier families who have large estates spread across multiple states and jurisdictions. For instance, there are quite a few people living in New York who invest in Florida retirement properties. Perhaps they rent these properties during the off-season or during the winter, just using them for small vacations. The plan is to have them paid off by retirement, sell the New York house, and retire mortgage free. But what happens when they die before retirement? Now there are homes in two states to deal with. Here are just a few considerations for those holding assets in more than one state.

Real Property in Other States

Probate laws vary from state to state. Most states share similar rules, but some are quite unique. One common rule is that probate is only required if the decedent has over a set threshold of assets. In Illinois, for instance, you do not need probate at all if the estate is worth less than $100,000. In that case, you can simply use a small estate affidavit. In New York, there is a shortcut available for those with less than $30,000. However, most jurisdictions require probate when real property – real estate – is concerned. For this reason, many people prefer to hold real estate in joint tenancy so that the property passes outside of probate directly to the co-owner. This may also be a wise idea for anyone whose only holding in another state is a home. Making a trusted adult child or a spouse a joint tenant will avoid probate.