New York Trusts & Estates

Should Your Estate Planning Wait on Tax Reform? in Yorktown Heights, New York

 

Since so few Americans actually pay the federal estate tax, that’s not enough of a reason to put off doing or updating your estate plan. It is better to get it done by year’s end and then adjust it, if necessary.

Some parts of the tax code may change, if the Trump administration gets its wish to eliminate the estate and gift transfer taxes. However, as reported by The Paradise (CA) Post in a recent article, “Some death tax advice,” even if those goals are accomplished, most people still have to address common estate planning issues.

Although saving estate taxes has been a major motivator for creating a revocable living trust, with federal taxes rarely an issue, state estate taxes may still apply.

Strategies utilized through the use of a trust may still be needed to limit the impact of state estate taxes. If you value privacy for yourself and your heirs, you should also consider a trust. A simple will or no will makes your life a public affair.

Think about who will inherit. You may need to address an inheritance for young beneficiaries, those with special needs and those vulnerable to other risks (such as addiction or financial improprieties).

Next, look at the way in which your assets are titled and your beneficiary designations. Don’t assume that assets will pass as desired. Documents can be drafted, but the actually re-titling of assets may not happen and your beneficiaries may need to be updated.

Succession planning is often the weakest link in a business owner’s estate plan. Without a succession plan in place, a family may find itself facing expensive and complex legal and financial challenges. A good succession plan can take many years to create and refine, regardless of the estate tax law.

Sit down with an experienced estate planning attorney who can help you address these challenges and plan for the future.

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Vulnerable Elderly Will Benefit From New Federal Law in New City, New York

 

The new law requires the DOJ to take action to investigate and prosecute crimes against the elderly.

The Department of Justice (DOJ) has a new set of requirements as a result of the Elder Abuse Prevention and Prosecution Act becoming law, which should lead to a more active role in deterring and punishing those who act against the elderly.

Federal officials are now authorized to go into states to investigate and prosecute unscrupulous court-appointed guardians and conservators who prey on their elderly wards. The bill also specifically targets email scam artists who prey on the elderly.

iAdvance Senior Care says in its recent article, “New elder abuse protections law,” that the new legislation says the DOJ must do the following:

• designate Elder Justice Coordinators in federal judicial districts and at the Department of Justice;
• implement comprehensive training for FBI agents; and
• establish a working group to provide policy advice.

The Department of Justice is required by the new legislation to establish best practices for data collection on elder abuse. The DOJ must also collect and publish information on elder abuse cases and investigations.

The DOJ, in coordination with the Elder Justice Coordinating Council, must provide information, training and technical assistance for state and local governments, so they can investigate, prosecute, prevent, and mitigate the impact of elder abuse, exploitation and neglect.

The new law also amends the federal criminal code to include “telemarketing or email marketing fraud” and add “healthcare fraud” to the list of fraud offenses that are subject to enhanced penalties.

In addition, the new law requires the Federal Trade Commission (FTC) to appoint an Elder Justice Coordinator within the Bureau of Consumer Protection, and the DOHHS (Department of Health and Human Services) must provide data on elder abuse cases referred to adult protective services.

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Talk about a Black Hole: Litigation Costs Deplete Estate Value by Millions in Yorktown Heights, New York

 

A combination of theft, forgery and other crimes, not to mention IRS fines, taxes and the cost of settling civil suits, and you can shrink a multi-million estate very quickly.

John Sullivan’s estate may have started out at $8 million, but in just two and a half years, it had been whittled down to about $200,000. The attorney representing the estate in a trial charging a man with forgery, theft and money laundering, presented jurors an amazing list of IRS filings, attorney’s fees, civil suit settlements and missing money that have all but decimated the estate.

Wealth Advisor’s recent article, “Litigation Leaves $8M Estate With $200K,” tells the story of a Texas attorney named Michael Deadman who was appointed temporary administrator of John Sullivan’s estate in January of 2015. He recovered $4.9 million from John Young, who was awarded the estate in 2014 based upon a contested will that bail bondsman Ray Zapata was convicted of forging.

In a bewildering presentation of IRS filings, and what looked to be non-stop attorney’s fees, Deadman told jurors of the $1.29 million IRS fine on a $4.4 million overseas account in Liechtenstein. Sullivan was in an IRS program that let him to pay taxes on the overseas investment over 10 years, which was deducted from the estate.

Deadman also said he had paid out $1.1 million in attorney fees to several firms after taking over the estate. The Sullivan estate paid $262,000 in property taxes and attorney fees for a property that Sullivan owned in Spain. The attorney also said the estate paid $1.6 million to settle sex abuse claims by two men against the decedent. In fact, there was evidence at the trial of a list of attorneys and accountants who continued to bill the estate, even while the trial continued.

Texas attorney Joe Hernandez first complained about Sullivan’s alleged will filed by Chris Hartman. Hernandez was called by state prosecutors and laughed at defense attorney’s accusations that he and Ray Zapata profited by sharing clients. Hernandez and Zapata had offices in the same building. Zapata was a bail bondsman and Hernandez was a defense attorney. Zapata testified in his forgery trial that Hernandez paid him 20% for referrals, but Hernandez told jurors that it was a lie. The Texas Disciplinary Rules of Professional Conduct (TDRPC) for attorneys forbids this practice.

Hernandez also testified that he had a confrontation with John Young before the will was probated. Hernandez said that he and his brother Frank attended the Sullivan estate probate hearing and told jurors that it was a “shocker to see someone lying through his teeth!” 

Zapata was testifying at the time that John Sullivan had written the will in question, leaving his estate to Young. Hernandez pointed at an enlarged high-resolution image of the will in the courtroom and confirmed Zapata’s handwriting.

A handwriting expert brought in to analyze the contested will and handwriting samples from the three men—Sullivan, Zapata and Young—didn’t have the definitive answer attorneys may have hoped for. Instead, handwriting expert Sarah Pryor told the members of the jury that it’s “far from conclusive that Ray Zapata wrote the will.” However, to make matters less clear, she also said it is “far from conclusive that John Sullivan did not write the will.

The trial –with who-knows-what’s-coming-next twists and turns—continues in Texas.

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You Might Live in Two States, but Only One is a Legal Residence in New City, New York

 

Enjoying the warmth of southern climates during the winter and escaping the heat in the summer is the ideal retirement lifestyle for many.  However, for estate planning purposes, you’ll need to pick one as your residence.

If you live in more than one state, an experienced estate planning attorney can help you determine which state will be best for you to claim residency for estate planning purposes, and what that state’s residency requirements are.

CBS Boston’s recent article, “Snow Birds: Protecting Your Estate While Living in Two States,” explains that it’s the laws of the state where you are legally a resident, which will determine your estate planning.

The federal exemption, the amount you can give away without incurring federal estate taxes, is $5,490,000. That can be a pretty high mark, so most individuals dying between now and December only have to worry about state estate taxes.

Ask an estate planning attorney about the estate tax laws of the state where you’re considering moving. There are 15 states that currently have an estate tax upon death, and six states that have an inheritance tax.

For example, Massachusetts is one of the 15. Its state exemption is now $1 million. That means if your estate is larger than $1 million, you could owe Massachusetts estate taxes. On the other hand, Florida, which is always seeking to attract more residents from the north, doesn’t have either an estate tax or an inheritance tax.

New Hampshire is the only state in New England without an estate tax.

It’s not uncommon for a person to own property and pay real estate taxes in both states, to have a bank account in both states and to purchase insurance in both states. Nevertheless, you can only live in one state. You’re just visiting the other state. Six months and one day determines where you live and where you vote.

If you own property in different states, it may mean that your heirs will need to go through the probate process upon your death in more than one state. Consider creating a trust and having the trust own the real estate to make the transfer of property less troublesome at your death.

It is advisable for those who live in more than one state to execute a Durable Power of Attorney in each state. If you unexpectedly need to have legal or financial decisions made by someone else, you’ll have that state’s proper documents in hand. This is especially important, if you have bank accounts and own property in each state. Prepare these documents now, and make sure that family members know where the documents are located.

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How Your Estate Plan Protects You during Life and Afterwards in Yorktown Heights, New York

 

Estate planning performs important functions while you are alive and after you have passed. However, you have some important decisions to make before a plan can be completed.

Your will is just one document in a series that make up a complete estate plan. Other documents allow you to convey your wishes for medical and financial decisions, as reported in The (Beckley WV) Register-Herald article, “Important Medical and Financial Choices.” By making these decisions in advance and memorializing them in an estate plan, you save your heirs and loved ones a lot of stress.

There’s often confusion between the similar sounding Living Will and Living Trust. The first is for medical purposes, and the second is for financial needs.

A Living Will provides a trusted friend or relative with the authority to make decisions regarding certain last medical measures, when you’re in a terminal condition. This has nothing to do with transferring assets or property after death.

A Living (or Revocable) Trust is a financial vehicle that provides for the after-death transfer of ownership of trust assets like a will, but has lifetime and after-death control of the trust’s assets by a trustee.

Another important estate planning document is a power of attorney (POA). This document gives an agent the authority to make medical and financial decisions under the specifically stated conditions.

These documents make certain that someone you trust will always have the power to act on your behalf—this can prevent the need for a court proceeding to secure this authority during a critical time.

Another item on your list of estate planning documents is the form used to select the beneficiary for your life insurance and retirement funds. Neither is controlled by your will, unless your estate is the beneficiary, which may not always the best option financially. That’s because naming your estate as the beneficiary of your retirement funds can result in additional income taxes being owed due to the short payout period when an estate receives those funds. No one wants their estate to pay extra taxes.

Everyone needs to have a will, but that is just a starting point. An experienced estate planning attorney will know what documents are needed in your state, so that you can ensure that you and your loved ones are properly prepared and protected.

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