New York Estate Planning Lawyer Blog

October 2, 2015

Distributions from Special Needs Trusts

If you have included a special needs trust as part of your estate plan, you need to know the importance of making sure the distributions from that trust are permissible per the terms of the trust and do not defeat the purpose of the trust by affecting eligibility for needed government programs.

Effect of Distribution

A special needs trust is one way to supplement the needs of a disabled loved one without compromising eligibility for means-tested government benefits, including Supplemental Security Income and Medicaid coverage. With respect to means-tested programs, federal law will require a reduction in benefits to the extent the beneficiary receives income or assets are otherwise made available to the beneficiary. For example:

September 30, 2015

Planning for the New York Estate Tax

by Ettinger Law Firm

The State of New York’s estate tax does not mirror the federal estate tax regime in many ways. A lack of careful planning may result in a New York estate tax liability even where the estate is not taxed at the federal level.

New York’s Estate Tax

New York’s estate tax, like its federal counterpart, is a tax levied on the value of the decedent’s estate upon death, and before distribution. New York’s estate tax parallels the federal estate tax with some exceptions.

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 25, 2015

Establishing a Charitable Trust as Part of Your Estate Plan

by Ettinger Law Firm

Trusts can be used as a useful tool in your estate plan to accomplish a variety of goals. One example is establishing a split-interest charitable trust. These charitable trusts are an irrevocable trust established for a charitable purpose of your choosing, while at the same time featuring a benefit to a non-charitable trust beneficiary. In addition to tax benefits received under federal law, charitable trusts offer the person establishing the trust, also known as the “settlor,” a controlled process to effectuate their gift to a selected charity. Examples of charitable trusts include a charitable remainder annuity trust (CRAT), charitable remainder unitrust (CRUT), and a charitable lead trust (CLT).

CRATs, CRUTs, AND CLTs

Establishing a charitable remainder annuity trust includes the transfer of property to a trust that first distributes a fixed annuitized portion of the trust property to non-charitable trust beneficiaries, followed by a distribution of the remainder to the tax-exempt charity selected by the settlor. Similar to the charitable remainder annuity trust, a charitable remainder unitrust also includes the transfer of property to a trust that first distributes an annuitized portion of the trust property to non-charitable trust beneficiaries, followed by a distribution of the remainder to the tax-exempt trust beneficiary; however, the amount of the annuity fluctuates with the value of the trust assets. A charitable lead trust differs from the charitable remainder annuity trust and charitable remainder unitrust in that the settlor will designate that the charitable beneficiary will first received a distribution of trust assets at least annually for a set period of time, after which the non-charitable trust beneficiary will receive the remainder of trust property. Each of these three split-interest charitable trusts offer dual benefit to a designated charitable purpose and the settlor’s non-charitable trust beneficiary.

September 22, 2015

Issues to Consider When Giving an Early Inheritance

by Ettinger Law Firm

You have saved and invested throughout your life to build enough wealth to fund your retirement. You have worked with your estate planning attorney to establish an estate plan to leave behind assets to your loved ones to share after you pass away. However, like many individuals, you are now considering giving your children or beneficiaries their inheritance before your death. There are many advantages to giving an early inheritance, but also some important considerations.

Advantages to Giving an Early Inheritance

Providing an early advance could provide your children with some needed financial help. Whether your children are experiencing financial difficulty, starting a new business venture, or are planning a big purchase, such as a house or getting married, providing them an early gift may be of greater value now than after your death.

September 18, 2015

Dealing with Personal Property in Your Estate Plan

by Ettinger Law Firm

When you create an estate plan, you face many decisions. One of those decisions will be how you should divide and distribute your property. You will spend a great deal of time deciding who will get what upon your death. One area that may need special attention is the distribution of your tangible personal property, especially those items that may not have significant monetary value, but may hold substantial sentimental value to you and your loved ones.

What is tangible personal property?

Under New York law, property is anything that may be the subject of ownership. The property specifically devised by your will or trust commonly includes real property, cash, stocks, motor vehicles, and other items of value you wish to pass on to those named in your will or trust. It is a good idea to define what you mean to include as part of your tangible personal property, which typically excludes cash, securities, and tangible evidence of intangible property. Generally, tangible personal property will include property, other than real estate, whose value is derived from the item itself, or its uniqueness, such as furniture, decor, jewelry, coin collections, photos, and other personal items you use in daily life. While you may consider your pets as members of your family, the law classifies pets as tangible personal property.

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.