Estate Planning

September 16, 2013

Planning Must Consider the Unforeseen Future, Not Just the Present

It may seem obvious, but it is critical for all of your long-term planning, from an inheritance to a business succession strategy, to take into account potential events that have yet to happen. Far too many New Yorkers engage in estate planning and financial planning that gives short shrift to potential changes in circumstance in the future. It is worth reiterating that all families should make plans that take into account unknown future events, like divorce, disability, a lost job, and more.

Divorce, Disability, and More

A Financial Advisor magazine article from late last month touched on the principle of long-term forecasting. The story is focused specifically on business succession planning, but the basic principles are applicable to many forms of long-term preparations. The story summarizes the potential unknowns as the “Four Ds” — divorce, disability, drugs, and death.

September 12, 2013

Huguette Clark Estate Negotiations Fail, Set for Trial

by Ettinger Law Firm

When most people envision legal trials, the first images that pop to mind involve bizarre crimes or large class action lawsuits. Thanks to movies and television shows, there is an assumption that trials are only for deciding whether someone is going to prison or if a large corporation acted inappropriately and hurt hundreds of innocent community members.

But believe it or not, trials actually stem from far less salacious situations–even disputes over wills and trusts.

$300 Million Estate Fight

September 10, 2013

Tax Evasion Case – Hiding Inheritance from IRS

by Ettinger Law Firm

One important purpose of estate planning is to ensure that as many assets as possible pass on to friends, families, and charities–instead of Uncle Sam. Using trusts and other legal arrangements to structure an inheritance is a prudent move for all New York families, but particularly those with sizeable assets. Taxes at both the state and federal level can take a significant chunk out of any inheritance. There are many high-profile cases of individual who failed to take advantage of all the planning tools at their disposal, resulting in an inflated tax bill. The estate of actor James Gandolfini’s, settled in New York, is just one recent example of how millions can be lost to taxes.

Illegally Cutting Corners

Unfortunately, some families may be tempted to cut corners and resort to illegal conduct in order to prevent the government from collecting on a large tax bill. The temptation to act in this manner is even higher when prudent estate planning is not conducted at the outset.

September 5, 2013

Inadequate Retirement Worries? – Tips to Boost Your Savings

by Ettinger Law Firm

Retirement saving. Those two works often strike immediate fear and worry in the heart of New Yorkers. It is hard enough for many families to meet their weekly needs, from mortgage payments to children’s tuition payments and everything in between. In the end, there is often little left over to stock away for one’s golden years. Add in the 2008 economic recession, which hurt many plans, and it is no wonder that New Yorkers are worried about the inadequacy of their retirement.

Fear not. Depending on your age, there is still time to put strategies in place to ensure access to resources for later in life. Even if you are knocking on retirement’s door, there are still steps that can be taken to catch-up.

Strategies from Forbes

September 3, 2013

IRS Issues Guidance on Federal Taxes for Same Sex Couples

by Ettinger Law Firm

Last week the Internal Revenue Service (IRS) released information on what has been dubbed a “hugely important” questions for same sex couples. Essentially, the new rules mean that same sex couples who are legally married in one state will still be treated as married for tax purposes by the federal government, even if they move to a state which does not allow same sex couples to marry.

More Protection for Couples

While the U.S. Supreme Court’s landmark gay marriage decisions last summer were seen as a huge leap forward for equality, the decisions did not come close to permanently settling the matter. A majority of states still do not allow same sex couples to marry. This creates a complex patchwork of rules for taxes, inheritances, public benefits, and privileges. Same sex couples can be treated very differently simply by crossing a state line.

August 30, 2013

Delaying Social Security: Should You Do It?

by Ettinger Law Firm

There is no such thing as universal financial advice. When reading any news story, blog post, or magazine article, one must remember that any advice or discussion about financial topics are general–they may not be best choice in your particular case. Many decisions about investments, use of trusts, and similar matters should only be undertaken after consultation with a professional upon explaining your exact situation.

But that is not to say that it isn’t important to learn about some of the general issues beforehand to better understand common financial planning themes. For example, what are the pros and cons of delaying the receipt of Social Security benefits?

A Q&A story from the Herald provides a helpful summary of the issue. A questioner just turned 62 years old. He was wondering if he should start taking Social Security now ($1,800 a month), wait until he is 66 years old ($2,4000 month), or wait even longer.

August 29, 2013

New Rules: Reverse Mortgages Will Be Harder to Get

by Ettinger Law Firm

One tool that seniors can use to receive funds for long-term care are known as “reverse mortgages.” A reverse mortgage works by converting home equity into cash–either a line of credit, monthly payments, or lump sum. The individual can remain in the home at this time, with the loan (and interest) due either upon the borrower’s death or moving out of the home. Reverse mortgages are only available to those who are at least 62 years old.

Shifting Rules

As reported recently in the Wall Street Journal, the rules about reverse mortgages are about to change. The U.S. Federal Housing Administration insures these mortgages and has power to regulate how they work. Not long ago the FHA decided to modify the program. The underlying goal of the changes are apparently to lower default rates and ensure borrowers are not unknowingly biting off more than they can chew.

August 26, 2013

How Does New York Stack Up for Retiree Taxes?

by Ettinger Law Firm

Do you have enough money to retire? It is a questions that tens of thousands of New Yorkers ask themselves every day. When talking with attorneys and financial advisers, many factors are weighed to determine whether enough resources are available for one to have the type and length of retirement that they want and need.

One of those factors, as always, is taxes. Retirement income is frequently taxed, with a portion of money going to state and local government. These are not necessarily trivial amounts, as the exact size of the tax burden may affect whether or not the nest egg is large enough to cash in one’s chips and begin the next phase of life.

Federal taxes will obviously be the same everywhere, but the rules about retirement taxes vary considerably from state to state. When making long-term plans regarding finances, it is critical to understand how state tax rules will affect your retirement

August 23, 2013

IRS Valuation & Taxes – The Michael Jackson Examples

by Ettinger Law Firm

Death and taxes; the two constants in life. There has been significant discussion in the past few years over the one tax that is itself most closely tied to death: the estate tax. At the federal level, the President and Congress have debated the exact rate of the the tax and at one point it should kick in.

But once those details are set, it is still not entirely easy to determine what one’s total estate tax bill is. That is because most individuals have assets whose value is hard to gauge. It would be straightforward if all of one’s wealth was in a bank account with a set balance or stocks with a clear value.

That’s not how it works in the real world, however. Instead, many have assets that must be “valued” before added to a tax bill. Who does the valuing and what decisions they reach may ultimately have significant effects on how much of an estate goes to Uncle Sam. As you might imagine there is frequently considerable disagreement regarding this matters.

August 21, 2013

DOMA Ruling & Retirement for Same Sex Couples

by Ettinger Law Firm

Much discussion around the Windsor case that struck down DOMA dealt with the estate tax. As a result of the decision, married same sex will indeed be privy to the same federal estate tax exemptions as their heterosexual counterparts. But the effects will go well beyond taxes at death. In fact, it is important for same sex couples to remember that federal recognition of their marriage will also affect retirement planning.

The sweeping ruling granting federal equality will likely mean that many same sex couples will need to “re-do” planning that they previously undertook to account for their unequal status under the law.

Retirement Planning