queens estate planning

Roth IRAs and Your Heirs’ Taxes

Published on: October 11, 2017 | by Ettinger Law Firm

One of the primary purposes of responsible, comprehensive estate planning is to make sure that you are able to distribute as much of your estate as possible to your chosen heirs. After all, you worked hard for a lifetime to build your estate and most people engage in estate planning to make sure as much of their estate survives as possible. A recent article from The Motley Fool reminds us of the role Roth IRAs can play in making sure that the inheritances you leave to your heirs do not fall victim to unexpected taxes. This is especially true in today’s world where there is a great deal of uncertainty as to the direction of our nation’s tax system.

Roth IRA Basics

A Roth IRA is an individual retirement plan that allows you to put a certain amount of money into it each year. The money you contribute to a Roth IRA will already be taxed. That means that qualified withdrawals from the Roth IRA will be tax free when you start to take them. Roth IRAs might even provide a tax credit for some of your contributions depending on a number of factors regarding your individual circumstances and financial situation. The earlier you make the choice to start a Roth IRA, the better as a Roth IRA must be active for at least five years prior to your death in order to escape federal income taxes.

Estate Planning Concerns for Same-Sex Couples

Published on: October 9, 2017 | by Ettinger Law Firm

When the United States Supreme Court legalized same-sex marriage, it opened up a lot of doors that had been closed to many people in society. However, it also created a significant amount of new legal concerns for same-sex couples. With marriage, a host of new questions and responsibilities have arisen. Not the least of those concerns is responsible, comprehensive estate planning. While comprehensive estate planning is crucial for all individuals regardless of their marital status or sexual orientation, it is an extremely important consideration for same-sex couples that may not have had an estate plan in place.

Potential Issues

An article from the Cleveland Jewish News points out that same-sex couples – especially unmarried same-sex couples – could still face a host of legal hurdles when it comes to the death of one person in the relationship. These concerns could include issues involving health care and power of attorney, which make it extremely important for unmarried couples to make sure documents addressing these concerns are in place should they be needed. Without these documents, there may be laws in place prohibiting an unmarried same-sex partner from making important financial and health-related decisions if an individual becomes incapacitated or otherwise unable to make such decisions on their own.

Understanding Elder Law Estate Planning – Trusts and Tax Reporting

Published on: March 18, 2017 | by Ettinger Law Firm

If you are the beneficiary of a trust, there are a number of considerations you should be making when filing your taxes. When filing taxes each year, you should determine how much of your trust distributions made throughout the year will be taxable. In the event that a trust retains income after the calendar year has ended, they will be subject to taxation on that leftover income, thus, it is important to communicate to your trustee, whether that is an individual or a corporate entity, your tax status and what you would like to maintain.

A trust consists of both income and principal. Principal is the corpus of the trust, being any trust property owned by the grantor and now the trust, as well as stocks and investments that have funded the trust. Income is the monetary amount made off of the investments or other products attributed to principal. Based on what distributions were made from principal and what were made from income, the trust must file a K-1 and a 1041.

The 1041 is the tax document important to the trust and trustee because it provides the trust’s deductions from its taxable income distributions made to beneficiaries. The K-1 is given to the beneficiary and gives them a breakdown of the distribution and what their tax liability is to be reported by outlining what distributions were made from income and what came from principal.

The Role of Trusts for Foreign Parents of U.S. Children

Published on: March 15, 2017 | by Ettinger Law Firm

Today, moving across the world is far more common than it used to be. More college-age students leave their home countries to pursue educational experiences abroad, and many often remain in the country in which they choose to study. Others leave their home country for a job opportunity or to start a new family of their own. Whatever the reason for leaving, many residents of the United States born in other countries that still have strong, close familial ties in those foreign countries may be at risk of losing portions of the inheritance their family members in other countries may wish to give them.

Tax Consequences

Not every country has a version of the estate tax, though the United States estate tax is not the highest estate taxing country out there according to Tax Foundation. As a result, residents of many other countries may not have to contend with an estate tax in planning to distribute their estate. Leaving an inheritance to their children outright is likely commonplace and causes little disruption to the inheritance process in many places. However, when a citizen of a foreign country wants to leave an inheritance to their child that may be a U.S. citizen, there can be estate tax complications. With the United States estate tax rate of 40 percent, this can have a significant impact on a U.S. child’s foreign inheritance.

Including Asset Protection Clauses in Your Estate Plan

Published on: February 20, 2017 | by Ettinger Law Firm

Comprehensive estate plans often include precautionary measures that ensure your assets are protected and distributed according to your wishes. Many times, many of your assets will be distributed to your spouse. However, it is important to think ahead for every possible scenario when engaging in comprehensive estate planning to prevent any unnecessary interruptions in the distribution of your assets once you have passed on. Some or all of the provisions discussed below could be a good fit for your estate plan and protecting your assets.

Simultaneous-Death Clauses

One scenario you may need to consider when engaging in responsible, comprehensive estate planning is one in which you and your primary beneficiary die at the same time or in a manner where it isn’t possible to determine who died first. Popular among married couples that often plan to leave a large part or all of their estate to their spouse, this type of clause allows you to appoint an individual who will be named as the first to die in situations where authorities are unable to determine who died first.

Back to Basics: Discussing Death and Your Estate In New York

Published on: June 22, 2016 | by Ettinger Law Firm

No one likes discussing their own demise. The topic is generally considered taboo amongst most people and is possibly the most uncomfortable conversation topic. This is unfortunate for everyone though, because if a person is unable to discuss their own death, chances are they are unwilling to plan for it either. That is one of the worst cases possible for not just for the person who fails to plan but their family members and people who rely on them as well. Discussing death is the first step to engaging people to plan their estate and while it is a difficult topic to broach, there are certain steps that a person can take to help bring people closer to planning their estate.

Do Not Put Estate Planning In Terms of Death

People looking to engage others about estate planning should not discuss death, rather they should focus on planning for incapacity. A good estate plan does not just encompass what happens when a person dies. It will also discuss plans for what happens when a person becomes incapacitated such as if they are in an accident and unable to communicate and are unconscious.