Results tagged “manhattan estate planning lawyer” from New York Estate Planning Lawyer Blog

Growth of Online Memorial Services

February 13, 2014,

Making preparations for funeral services, burial preferences, and other memorial issues is a natural part of New York estate plans. These details have been a staple of the mourning and remembrance process for centuries. However, if trends continue, a new form of memory may be added to many plans: professional, digital tributes.

Online Memorial Websites
The stratospheric rise in popularity of online social networks and blogs should make it no surprise that remembrances for lost loved ones are moving online. Placing an obituary in the local paper or buying a memorial ad on the yearly anniversary is no longer the only way to share information about a passing and gracefully remember those who are gone. The process has moved online.

The Wall Street Journal published a story this week that discusses many of the most common options local families are turning to when trying to craft an online memorial for their loved ones. These sites are often referred to as "virtual gravestones" that allow friends and family a shared place to mourn across the web. A few of the most common vendors:

Legacy.com
ForeverMissed.com
LifeStory.com
Facebook

Of the above list, Facebook and LifeStory are free. The Facebook option is simply conversion of an old account into a "Memorialized Account." This preserves many of the memories and message on the page for friends and family. Similarly, using a Facebook account, LifeStory.com provides a more formal online memorial with specific pictures, messages, and memories added.

Alternatively, Legacy.com and ForeverMissed.com are stand-alone memorial companies that offer various degrees of customization. These sites range from a $35 to $100 and vary as to whether there is an annual subscription renewal charge or if the site will remain up indefinitely.

All told, one reviewer who searched various sites in an effort to compare features and functionality argued that all of these formal online memorial sites have much room to grow. Many of the sites seem outdated and have not fully embraced the social connectivity that undergird so much online browsing today. For example, critiquing Legacy.com (currently the largest provider online memorials), the reviewer noted that the site "pages are limited to a collection of preset boxes and small photos that might have been cutting edge in 2002."

The safe bet is that more and more options will pop up in the coming years for New York residents to craft official online memorial spaces. These tools may eventually make their way into formal estate plans so that residents are able to specifically explain how they would like their online remembrance to look and feel.

Estate Planning Tips from the Stars - James Gandolfini's Will Filed in Manhattan

July 9, 2013,

Last month many in the entertainment world were shocked and saddened by the sudden death of New Yorker James Gandolfini at the age of 51. His passing from an apparent heart attack is a somber reminder that none of us know for sure what the future holds.

This week reports were released discussing some of the estate details. Gandolfini's will was made public and filed with a court in Manhattan. Wills are public documents when filed with the court. The only way to keep these matters private is by using trusts and other devices which transfer property automatically without the need to go through the probate process--Gandolfini did make some arrangements outside of the will that are not known publicly.

Gandolfini Will
A look into the late actor's estate planning documents reminds that the basics of transferring assets after a passing are similar for everyone, from regular community members to the rich and famous.

All told, Gandolfini's estate may be worth nearly $70 million. That is broken up into a range of assets. As with most, the majority of his wealth will pass on to his children. A CNN analysis of the will suggests that his 14-year old son was the named beneficiary of a $7 million life insurance policy. That policy was held in trust and set up in his name. In addition, the trust may purchase a condominium that Gandolfini owned in Greenwich Village.

Gandolfini's current wife will receive most of the tangible property in the estate, though she will not benefit from any other major provision in the will. The document states that other arrangements were made for the wife, outside of the will.

In addition, Gandolfini owned property in Italy. That will be split between the 14-year old son and Gandolfini's second child, an 8-month old girl. The property will be held in trust until the younger child reaches the age of 25. Interestingly, Gandolfini used the will to offer his advice about for the property. The actor wrote, "It is my hope and desire that they will continue to own said property and keep it in our family for as long as possible."

The will lays out specific provisions for several others that he wanted to recognize, including his nieces, two assistants, his godson, and family friends.

These estate planning details from Gandolfini should be used as a general reminder of the many different options available when crafting your long-term wishes. If you haven't made arrangement yet, there is no benefit to waiting. Act now and ensure your family will be protected no matter what.

Obama Budget Proposal Calls for Changing Charitable Deduction Details

April 15, 2013,

Last week we discussed the release of President Obama's proposed budget. For estate planning purposes, one of the most obvious red flags in that proposal was a call for yet another edit to the federal estate tax. The President wants to raise the tax rate and lower the exemption level again, altering what was some thought was a more permanent fix agreed upon in the law passed in January.

But the estate tax is not the only aspect of the budget proposal which might affect long-term planning for New York residents. For example, the President is also calling for changes to how charitable contributions implicate tax matters. The possible change is being suggested in an attempt to increase tax revenues to plug budget holes.

The Future of Charitable Deductions
As discussed in a Forbes story, the proposal calls for a reduction in the value of charitable tax deductions. This is an idea that is not new, as the Administration has been calling for it for several years. The change would reduce from 35% to 28% the amount of any charitable deduction that can be taken for tax purposes.

Critics of the idea have been quick to pounce, one noted: "The White House proposal would raise the cost of giving to charity from 60 cents per dollar to 72 cents per dollar. That's a 20 percent increase in what can be called the 'charity tax.'" Some point to studies which indicate that anywhere from $2-$9 billion in fewer charitable contributions will be made each year as a result in the tax deduction shift.

Opponents of this shift also contend that the charitable tax deduction is unlike similar tools which may rightly affect only the affluent. For example, deductions can be taken for home interest mortgage payments. That deduction obviously benefits those with expensive homes more than those with smaller homes. In the same way, the charitable deduction benefits those capable of donating the largest sums more than those who are only able to give a little. But, there is a big difference between using taxes to incentivize the purchase of a large home versus using it to incentivize charitable giving.

As with the estate tax proposal, it is important to remember that many ideas in these budgets are merely opening salvos in negotiations--nothing is certain. But it is important for New York residents to be aware of this possibility and talk with an estate planning lawyer and financial advisers to see if it alters the feasibility of any long-term plan.

Obama Budget Proposal Calls for Changing Charitable Deduction Details

April 15, 2013,

Last week we discussed the release of President Obama's proposed budget. For estate planning purposes, one of the most obvious red flags in that proposal was a call for yet another edit to the federal estate tax. The President wants to raise the tax rate and lower the exemption level again, altering what was some thought was a more permanent fix agreed upon in the law passed in January.

But the estate tax is not the only aspect of the budget proposal which might affect long-term planning for New York residents. For example, the President is also calling for changes to how charitable contributions implicate tax matters. The possible change is being suggested in an attempt to increase tax revenues to plug budget holes.

The Future of Charitable Deductions
As discussed in a Forbes story, the proposal calls for a reduction in the value of charitable tax deductions. This is an idea that is not new, as the Administration has been calling for it for several years. The change would reduce from 35% to 28% the amount of any charitable deduction that can be taken for tax purposes.

Critics of the idea have been quick to pounce, one noted: "The White House proposal would raise the cost of giving to charity from 60 cents per dollar to 72 cents per dollar. That's a 20 percent increase in what can be called the 'charity tax.'" Some point to studies which indicate that anywhere from $2-$9 billion in fewer charitable contributions will be made each year as a result in the tax deduction shift.

Opponents of this shift also contend that the charitable tax deduction is unlike similar tools which may rightly affect only the affluent. For example, deductions can be taken for home interest mortgage payments. That deduction obviously benefits those with expensive homes more than those with smaller homes. In the same way, the charitable deduction benefits those capable of donating the largest sums more than those who are only able to give a little. But, there is a big difference between using taxes to incentivize the purchase of a large home versus using it to incentivize charitable giving.

As with the estate tax proposal, it is important to remember that many ideas in these budgets are merely opening salvos in negotiations--nothing is certain. But it is important for New York residents to be aware of this possibility and talk with an estate planning lawyer and financial advisers to see if it alters the feasibility of any long-term plan.

Don't Forget: There is a New York Estate Tax on Top of Federal Tax

April 10, 2013,

Much discussion at the end of last year dealt with the estate tax. As federal officials groped for a compromise to avoid the so-called "fiscal cliff," details about the federal estate tax were one part of the negotiations. Democrats wanted it returned to levels during the Clinton Administration while Republicans wanted it eliminated altogether.

Just before the deadline, a law was passed which apparently settled some of the matters of contention. In so doing, it seemed to finally provide some permanence to the federal estate tax. The tax rate now tops off at 40% (a jump from the previous 35%) and begins on parts of the estate over $5.25 million. The exemption level is pegged to inflation, and so it will rise slightly each year.

With news of this new estate tax compromise (and its relatively high exemption level), many have pointed out that the federal tax is now only a concern to a small slice of the population. After all, the majority of residents will not die with assets over $5.25 million, and so estate planning to avoid that federal tax is unwarranted.

Yet, in all the discussion over the tax and the political battle around it, some may be under the impression that the federal estate tax is the only major tax issue with which they need to be concerned regarding their long-term planning. This is misleading. That is because, among other things, many states still have their own separate estate tax. And the state taxes usually kick in at far lower levels than the federal one.

That is certainly true in New York. Our state taxes all assets over $1 million, with a top rate of 16%. While this may still seems like a large amount, there is a mountain of difference between one and five million dollars--and a huge number of families will need to account for New York estate taxes while not worrying about federal estate taxes. When the value of retirement accounts, homes, cars, stocks, bonds, and other assets are all taken into account, it is not uncommon for an estate to pass the $1 million threshold even when community members would not expect it to do so.

The bottom line is that many New Yorkers need to be aware of this estate tax burden. Don't be deceived about news stories touting a $5.25 million exemption level. Be sure to talk with a NY estate planning lawyer and ensure you are best positioned to pass as large a portion of your assets as possible in the manner you desire.

Can You Reject an Inheritance You Don't Want?

February 22, 2013,

Communication is absolutely essential to quality estate planning. That includes both sharing of information between client and planner, as well as the client being open and honest with their family about their wishes. Some might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out only after they are gone. But this opens up the door to potential feuding and costly legal challenge. The goal of proper planning is to make transfers as seamless and efficient as possible, and meeting that goal requires others to know what to expect when the time comes.

Most of the time, unwelcome inheritance surprises come in the form of not getting what you expected to receive. Many adult children are surprised when a parent leaves assets to someone else or does not distribute equally between siblings. But the opposite may also be true. You may receive an item that you do not want. For a variety of reasons, not all gifts may be welcome. There are steps that can be taken to disclaim a gift that is part of an inheritance but they are often confusing.

Thanks, But No Thanks
As referenced in a NJ News article on the subject, both state and federal law set rules that must be followed to disclaim a gift. Failing to do this properly may result in various complications, including tax issues. Generally, however, a disclaimer must be made in writing and be irrevocable. The disclaimer cannot be made if you already accepted some benefit from the gift. The disclaimer must be received by the executor in a timely manner

There are many other complications that come with disclaiming, however. If the disclaimed gift reverts back to the estate afterwards (and the same person is set to inherit part of the estate generally), then the individual will need to disclaim the gift yet again as a portion of the inherited remainder.

Importantly, the above rules roughly describe the process when a gift is transferred via a will. Options may be far different if alternative methods are used--like trusts. At the end of the day, it is absolutely critical not to make decisions about these matters without first visiting with an estate planning attorney and other professionals to understand the implications and the exact rules that must be followed. At the same time, it is helpful to avoid this possibility altogether by having discussions well-beforehand so that a plan can be crafted whereby heirs know what they are getting and have accepted it.

Retirement Planning -- The Stages

February 19, 2013,

There are no shortage of articles discussing the need to get serious about planning for your retirement. Money is seemingly always tight, and taking a significant portion of assets and putting it away for another day is rarely an easy step. That is particularly true for middle class families who generally have much more pressure to ensure that income is sufficient to meet monthly bills. Of course, regardless of the difficulty, retirement planning is essentially for all of us--health and happiness in one's golden years depend on it.

A recent New York Times article provides some helpful analysis of the "stages" that many go through in putting off retirement planning before eventually buckling down and getting it done. The author argues that the well-known five stages of grief are perfectly adept at describing the stages of long-term financial planning as well. Those five include: denial, anger, bargaining, depression, and acceptance.

At first, many deny that the task is all that important. The article suggests, for example, that the amount of money needed to be saved is usually far higher than most suspect--so much so that many simply deny that the saving requirements are accurate. When that figure is shown accurate, many get angry about the difficulty of planning for retirement. With so many daily financial pressures it sometimes seems unfair that planning for one's retirement is such a burden.

Eventually, many move into the "bargaining" phase. This may involves attempts at shortcuts--saving less than necessary or using do-it-yourself options to plan for contingencies. A few people stop at this phase, leaving in place inadequate plans that are essentially an accident waiting to happen. In the estate planning context, this often means that residents leave their intentions unclear, setting up likely family feuds. Others, after acknowledging that half-measures are insufficient, fall into "depression," feeling dismayed about the task.

Fortunately, most people eventually make it to the final stage--admitting the reality and accepting the need to properly plan for retirement and put long-term affairs in order.

At the end of the day, long-term planning will not go away. Once you get beyond arguing about it, worrying about it, or assuming that the situation is hopeless, it is time to take deep breath and visit with professionals to get it done. That may include tax experts, financial analysts, and New York estate planning attorneys.

Trusting Kids with Large Inheritances Remains a Challenge

January 30, 2013,

One of the most common concerns that parents have when creating an estate plan in New York is worrying about passing on too much wealth to children who cannot properly handle it. After a lifetime of hard work, ingenuity, and prudent planning, the last thing many families want is to see a child obtain an inheritance and then lose it. One need only check newspapers headlines to see celebrity examples of younger individuals with too much money whose lives take a turn for their worst as they fail to handle their wealth carefully.

A Wall Street Journal article last week discussed this issue in the context of the now seemingly permanent federal estate tax rates. Per the "fiscal cliff" agreement, the estate tax law will allow each individual to shield up to $5.25 million. For a couple, that allows $10.5 million to be given to others tax-free.

While this is good news for those who have this much wealth to pass along, it does raise some questions for families. Is your child--no matter what age--prepared to handle an inheritance of this size? Will it be lost to creditors? Taken by a spouse? WIll the money change the child's motivation or long-term goals?

It is entirely prudent to ask these questions and work with estate planning attorneys to come up with creative ways to protect against one's concerns.

Of course, the trust is the crucial legal instrument that allows wealth to be passed on with certain protections and limitations set up, depending on your specific situation. Every trust is managed by a trustee. The trustee can administer the legal entity to ensure that beneficiaries are taken care of while protecting the principal. For example, the trustee can work with the beneficiaries to dole out funds when necessary--for college or a wedding--while not giving the beneficiary free control right away. Alternatively, disbursements to the beneficiary can be made in pieces, with a certain percentage of the inheritance given in five year increments.

At the end of the day, there are many different options that are available to families of considerable wealth to ensure that they pass on an inheritance without concern about how it will be used or affect their children. The first step is to visit with an estate planning lawyer who can provide tailored advice about what legal tools can be used to meet the specific needs of your family.

Donor-Advised Funds for Charitable Giving

December 18, 2012,

The holiday season is a popular time for charitable giving. It is helpful for those considering gifts--particular sizeable donations--to properly think through all of the tax and legal implications. There are smart ways to make contributions and clumsy ways. As always, an estate planning lawyer or similar professional can explain how any such decision is best carried out.

For example, the Wall Street Journal reported recently on the rise of "donor-advised" funds. The use of these tools is likely spurred by two tax uncertainties in the upcoming year. Will charitable deductions on taxes be limited in the future, counseling toward a large gift this year? Will income tax rates increase next year, counseling toward using the deduction next year instead of this year? It is a somewhat tricky problem, as no one knows for sure what lawmakers might decide.

That is where these donor-advised funds come into play. They are accounts managed by national charities and foundations. The basic idea is that a donor can give the gift this year--locking in a tax deduction--while waiting to actual disperse the funds to the charities as they see fit over time. The funds grow tax-free throughout this period.

Interestingly, the National Philanthropic Trust and other sources provides data on the sharp rise in use of these funds. Many of the largest charitable entities increased anywhere from 60% to 80% in use of these funds this year as compared to last year. And that is on top of the fact that last year saw a 10-15% rise in use from 2010.

Most accounts can be opened with $5,000--large sums are not needed. The donations can then be given out in small increments of as little as $50. In other words, there is a lot of flexibility for those with assets of all sizes. When using these tools however, it is important to have tailored advice on the best manner in which to give. For example, it might make sense to donate stock that has appreciated, instead of donating the profit after sale of the stock. By selling the stock directly some capital gains can be saved and a larger charitable deduction can be taken.

Of course, these donor-advised funds are just one of many ways that might be appropriate to give to charities smartly. Various trusts and other legal arrangements are available to ensure your gift is maximized. No matter what the case, though, it is important to act quickly, as the future remains uncertain and it is helpful to lock in current rates as soon as possible.

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First "Fiscal Cliff" Proposal Made -- What It Means for Estate Planning

December 4, 2012,

You cannot turn on the TV, flip open a newspaper, or pull up a news website this month without seeing the words "fiscal cliff." As many are aware, this refers to sweeping, mandatory federal tax and budgetary changes that are set to take effect January 1st unless the Congress and White House pass legislation with an alternative plan. Essentially the "cliff" is about $7 trillion worth of tax increases combined with significant spending cuts across the board--including everything from Medicare and Medicaid to the military.

What is interesting about the cliff is that virtually no one on either side of the aisle actually wants it to take effect. Instead, it was only put into place as a compromise over a previous debt ceiling legislative fight. The idea was that that the cliff would be so abhorant to both sides that its impending appearance would force a compromise. However, as the end of the year gets closer, more and more observers are worrying that even with the serious consequences of the cliff, no compromise is in sight.

Currently, the Obama Administration and Congressional leaders (most notably, the Republican House leaders) are trying to reach agreement on an alterantive to prevent the mandataory changes. As part of that effort, President Obama recently released his "first offer." As summarized in a recent article, the offer is far from what the Republican leaders have proposed, so it is unlikely that it will be taken seriously. Essentially, it calls for around $1.6 trillion in tax increases over a ten year period--mostly related to expiration of the so-called "Bush tax cuts." In addition, it calls for modest stimulus spending. The proposal would also permanently eliminate Congressional control over the debt ceiling level (which caused the current crisis to begin with).

On the one issue that has the most direct impact on estate planning, the proposal calls for estate tax rates to return to 2009 levels. That is a $3.5 million exemption level and a top rate of 45%. That is compared to a current $5.12 million exemption at 35%.

What Does It Mean For You?

No matter what the final resolution, advocates, advisors, attorneys, and others on all sides of the issue agree that stability is key. For planning purposes, it is always advisable to know what the rules will be for the future, instead of having the risk of major changes every two years.

For those hoping to dig deeper, the Tax Policy Center has a "Fiscal Cliff Calculator" that allows you to plug in your own details and see how various proposals and the cliff itself will personally affect you. You may be surprised at the significant nature of the results. For example, the "cliff" affects everything from unemployment benefits to payroll taxes, and so everyone is likely to be affected, no matter what their current situation. Be sure to keep a close eye on the possible proposals as they are discussed in the coming weeks. It is also important to talk to your financial advisors and visit with estate planning attorneys to learn more.

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Is "Prepaid" Life Insurance Becoming Popular?

October 19, 2012,

Life insurance is an important piece of long-term financial security for local families. It is entirely reasonable for parents and family breadwinners to wish to provide some security to their loved ones in case the unthinkable happens. However, with money tight and uncertainty about financial security remaining, some are unsure about the benefits of life insurance. Those in the life insurance industry have argued recently that their market is shrinking and returns are dropping. To jump-start the industry, some are now turning to a new product to sell to more community members.

A recent story in "The Motley Fool" provides some context for the product that may or may not be a good fit for some local families. This unique insurance option is actually a prepaid life insurance policy. It has been called the "marvel of simplicity." The product, spearheaded by a unique collaboration between MetLife and retail giant WalMart, is essentially a short-term one year life insurance policy that provides up to $25,000 in coverage. These are not huge sums, but the idea is to open the insurance up to a much larger market. MetLife likely sought out the arrangment so that they could tap into Walmart's large consumer base while saving costs of middlemen broker fees.

Interstingly, this approach is not the first of its kind. In the past Canadian insurer Manulife offered life insurance products through the U.S.-based big retailer Costco. In addition, in the past Walmart has sold customer various financial products, even including things like mortgages.

The article argues that MetLife is engaging in this somewhat unique life insurance marketing tool as a way to bolster sales in a slagging market. This latest move seems targeted at the less affluent and perhaps less financially aware community members. Selling financial products to this base--like prepaid debit cards--has proved lucrative in the past, and so MetLife may see long-term benefit down the road.

But is this sort of very short time prepaid life insurance plan right for you?

It is impossible to make any specific pronouncements about the merit of these financial tools. However, it must be noted that these one-year agreements are far different than long-term plans that provided security well into the future. As always, it is critical to seek out the help of financial experts, estate planning lawyers, and others who can explain what issues to consider and how any financial move might affect long-term plans.

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