Articles Tagged with new york city estate planning

Comprehensive estate planning is a lifelong process. There are always reasons to review and update your estate planning portfolio, including major life events life births or divorces. Not only does estate planning need to be a part of adjusting to major life changes, but the components of your estate plan can be used to protect your assets as well as those of your loved ones during these types of life events. However, one common pitfall of a comprehensive estate plan is when individuals own or acquire property outside of a trust. Doing so can result in unintended tax consequences as well as risk exposing your property to the probate process and/or creditors.

Property and Revocable Trusts

When you own property, placing that property in a revocable trust might be a good move for you based on your individual circumstances. Some benefits of a basic revocable trust include allowing assets within that trust, including property, to avoid the probate process. The probate process can be time-consuming and add unnecessary expense to settling an estate. It is also possible that placing assets like property in a trust will allow your family members to retain control over those assets if you are incapacitated to the point where a court may wish to appoint an outside guardian. Assets not within a trust are subject to probate and the potential loss of familial control in case of your incapacitation.

Most people engage in comprehensive estate planning to ensure that the things they have worked for throughout their life can pass along to their heirs. Preserving your assets is an important part of ensuring that you are able to pass as many assets to heirs as possible. There are a variety of methods that allow you to successfully preserve assets in the face of major life events, if you are being pursued by creditors, or even from the financial costs of probate. It is of particular importance to make sure that high value assets, like real estate, are protected in these situations. Fortunately, there are several steps you can take to make sure that your real estate assets are able to be passed on.

Gifting

Perhaps one of the most common ways to protect real estate assets is to gift them to a friend or family member. You can either make an outright gift of the real estate or place real estate in a trust for a person. If you make an outright gift of real estate to another, you may be subjecting the transaction to the federal gift tax. However, the gift tax may ultimately be significantly less than the estate tax you could face if real estate you are gifting were to be included in your final estate valuation. An experienced estate planning attorney can help you understand both the federal gift tax and federal estate tax, as well as their state-level counterparts, to help you make more informed decisions about gifting high value and/or other assets.

The popularity of trusts in estate planning has increased steadily over the last few decades. They are often excellent vehicles that can help people protect their assets and avoid excessive tax penalties related to such assets. One of the more traditional types of trust is known as a Crummey Trust. A Crummey Trust is a trust structured in a way that allows parents to make annual deposits to it within the currently established annual limit while allowing for beneficiaries to maintain a present interest in gifts. This trust has some features that might make it applicable to your estate planning needs.

Features of a Crummey Trust

A Crummey Trust allows individuals to use the annual gift tax exclusion while funding a substantial trust that a recipient cannot access until a certain age. As such, it requires the recipient to have what is known as a present interest in the trust. This means that the recipient has immediate access to funds deposited into the trust. In order for Crummey powers in a trust to adhere to this present interest, funds deposited to the trust are available for immediate withdrawal/use by the recipient for a reasonable period of time, such as 30 days after the gift has been made. Once 30 days has passed, the money automatically gets deposited into the trust where it will be protected until the age at which the recipient has been designated as having access to it.

Comprehensive estate planning is an important part of aging, especially if you have already started a family. Estate planning for young families can be an unpleasant topic, but it is extremely important. Making sure that your heirs are provided for not only provides you with peace of mind, but also ensures that their needs can be met if you are not able to meet them yourself. When you begin to think about estate planning options, the following tips from a recent article in the Chicago Tribune can help you direct your energy and resources toward making the right decision based on your circumstances.

Make an Inventory of Your Assets

The first step in comprehensive estate planning is to figure out exactly what you are working with. You can do this by making a list of all of your assets so that you can see exactly what you have to leave to your heirs. Make sure to include everything: cars, checking accounts, retirement plans, digital property, trademarks you may own, jewelry, clothing, and any other assets you may have. This will give you an idea of how complicated the estate planning process might be for you and can help you determine which estate planning strategies might work best for you. You will also need to start thinking about who you would like these various assets to go to as that may have a significant impact on the types of estate planning strategies you ultimately engage in.

Comprehensive estate planning can be a confusing process. It can be even more confusing with larger estates or with multiple children. Parents want to ensure that their estate plan provides for their children’s financial security, but in circumstances where children may be in different financial situations or a variety of characteristics may impact how parents elect to distribute their assets estate planning is an important part of avoiding a fight over the estate plan down the line. The following tips, adapted from a recent article from Forbes about circumstances that often combine to lead to fights over estate plans, can help you prepare your estate plan in a way that avoids fighting over it among your heirs. In preparing your estate plan cautiously and planning to avoid potential fights between heirs, you can ensure that more of your assets are preserved for your heirs and that their relationships do not have to face the test of a legal challenge to your estate plan.

Include a No Contest Clause

One of the most direct ways of avoiding potential fights over your ultimate decision in how you wish to distribute your assets to your heirs is no work with your estate planning attorney to include a “no contest” provision in your Last Will and Testament. Doing so allows you to notify heirs that anyone that chooses to contest the Will stands to inherit nothing should they try to contest the validity of the Will through legal channels and lose. The mere existence of this type of clause can discourage individuals from fighting over the provisions of your estate plan.

The World Intellectual Property Organization defines intellectual property as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images sued in commerce.” Typically, intellectual property is protected by legal mechanisms such as patents, trademarks, and copyrights that help people achieve and maintain recognition and financial benefits from things they have created. While intellectual property has many specific laws to help govern it and some attorneys choose to focus their practice on intellectual property law, intellectual property is personal property and can be an important part of comprehensive estate planning.

Distributing Intellectual Property

There are several considerations that come into play when determining how to distribute intellectual property. For some people, intellectual property can be the main source of their financial livelihood. Others may have inherited or otherwise acquired certain intellectual property rights throughout their lifetime and use them for supplemental income purposes. Regardless of the way in which you came to possess intellectual property, if you want to continue benefiting from it then you can and should keep personal possession of it until you no longer depend on or desire the income from it. If you do maintain control over intellectual property, make sure that you have provided for its distribution in your estate planning in case of unforeseen circumstances.

Sometimes after setting up a trust, circumstances occur that change our goals for that trust. Recently, we wrote about how to fix a broken trust which occurs when a trust no longer serves the purpose for which it was established. However, a broken trust is not always the only reason a trust might need to be modified. Depending on the circumstances surrounding your trust, there are several factors to consider when deciding whether or not to move a trust.

Common Reasons to Move a Trust

One of the most common reasons for creating a trust is to take advantage of more favorable tax consequences related to trusts. As such, one of the most common reasons to want to move a trust is to take advantage of more favorable tax-related trust laws in another state. Some other reasons for moving a trust might include:

More and more Americans are getting married multiple times. As multiple marriages become more common, proper estate planning becomes more important. Tools such as prenuptial agreements can create an additional level of protection for you and your loved ones.

Protecting Family Heirlooms: Dave & Mary

Prenuptial agreements can be especially helpful if you or your spouse have children from prior marriages. Many people who remarry would like all or part of their estate to go to their children. Heirlooms or even family homes are often passed on the children. However, without proper estate planning these wishes could be ignored.

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