Archive for the ‘Trusts’ Category

Should You Consider a Trust for Your Child’s Inheritance?

Monday, August 4th, 2014

This conversation comes up a lot with our estate planning clients: “So, you’re leaving your entire estate equally to your three kids,” we say to our client. “Do you want to leave it outright or would you consider putting it in a trust for them?”

The two most common responses:

  •  “No, my kids are all OK. They can manage money and would be insulted if their inheritance was left in trust.”
  •  “No. If they can’t manage their inheritance then I can’t help them. I don’t want to try to control things after I’m gone.”

Then, we explain that creating a trust is actually a good thing for the kids but it’s usually hard to convince clients. So let’s try it here, and then we can just hand them this article.

Why consider a trust for your child’s inheritance? It may be a real benefit to them, protecting their inheritance from their creditors, spouses, even estate taxes. Let’s look at each of those concepts briefly:

One common concern we hear: “we love and trust our daughter, but though we like her husband we wouldn’t want him to inherit our assets if something happens to our daughter.”   By creating a trust for your child’s inheritance, you make it easier to keep the property separate from spouses and more likely to pass to your grandchildren on your child’s death. Sadly, divorce is very common: you can help keep the inheritance from being considered as part of the property to be divided if your daughter does divorce.

Let’s consider creditors. “Our son is a doctor,” you say, “and he has plenty of money.” Ah, but professionals are vulnerable to future malpractice lawsuits, and anyone can have even a substantial estate drained by an auto accident or medical crisis. Creating a trust for your son can help protect the inheritance from lawsuits, creditors, and bankruptcy.

How about taxes? If your daughter is a successful professional, she might well have a taxable estate on her death. That could be true even though she is not particularly close to that figure today. If estate taxes do kick in, they start at a very high 40% on the federal level. New York currently has an estate tax on estates over $1 million.  If you leave your daughter’s inheritance in trust, you can fairly easily arrange to keep it out of her “estate” for tax purposes.

So there are good reasons to leave an inheritance in trust, even though all your children are responsible and your estate is modest. But aren’t there some serious downsides? Doesn’t it mean a lot of additional costs and imposition of a bunch of difficult rules? Not really.

Depending on your family circumstances, you might even name your son trustee of his own trust. Or make your son trustee of the trust for your daughter, and make her trustee of his trust. Or make your daughter (you know, the one with her CPA who works for the bank) trustee for all the kids’ trusts. In other words, creating a trust does not mean you have to incur professional trustee fees though it might actually make sense to name a non-family trustee. We can talk about those options.

The trusts for your children will have to file tax returns each year. That will in fact mean a small additional cost. But the total amount of income tax paid need not increase. It should be fairly easy to assure that each trust’s income is taxed to its beneficiary, rather than paying taxes at the (often much higher) trust rates. We can talk about those issues, as well.

What about your son’s access to the money? Do you think he might want to use his inheritance to pay off his mortgage, or to allow him to put more away for retirement, or to send your grand kids to college? You can give him the power to demand money from the trust, or give the trustee direction to follow those kinds of requests. Let’s talk about how much control you want to give each of your children over the trust while they are alive. And on their death, you can even give your children the power to name which of their children (or spouses, or charities, or whomever you want to permit) will receive the remaining trust’s assets.

Cost? Setting up a trust for each of your children will likely increase the cost of your estate planning but by a pretty small number, in most cases. These principles apply even (perhaps especially) if you are leaving your estate to grandchildren, nieces and nephews, or anyone other than your children.

As you can see, there are many benefits of using a trust in your estate planning.  Keep in mind, however, that one size does not fit all and it is important to have your documents tailored to meet your specific needs.

Learn more about elder law and estate planning by visiting www.elderlawnewyork.com

National Financial Literacy Month: Six Steps Toward Successful Estate Planning

Tuesday, April 1st, 2014

In support of National Financial Literacy Month (April) and National Estate Planning Awareness Week (3rd week in October), the following estate planning article contains a very important message:

Estate planning is a financial process that can protect you and your family and is a very important component of your overall financial planning. Now is the perfect time to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.

Without an estate plan, when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.

The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.

Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.

Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.

Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now. See the checklist provided below to help update your estate plan:

CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

  • Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.
  • Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.
  • If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.
  • You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.
  • There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.
  • Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.
  • To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.
  • Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.
  • GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:
  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?
  • Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

  • Try sketching a picture or flow chart of your existing estate plan. Review your appointees:
  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney – Property Management
  • Advance Health-Care Directive or Health-Care Power of Attorney

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.

 

Learn more about National Financial Literacy Month by clicking here. For more information on estate and financial planning content contact v.sabuco@TheFinancialAwarenessFoundation.org.

 

 

 

Sharing Caregiving Responsibilities Among Siblings

Thursday, November 14th, 2013

Caring for an elderly parent in declining health is a big responsibility, and one that can have a significant effect on the caregiver’s financial and emotional well-being. Having a sibling to share in that responsibility can make things easier, but it can also lead to conflict and resentment. It is important to understand the issues that may arise when two or more adult siblings are caring for an elderly parent, and the best ways to resolve problems.

One question that usually comes up at the outset is who will be the primary caregiver. If only one sibling lives close to the parent who needs care, that is often the deciding factor. When two or more siblings live close by, then the decision often depends on work schedules. If none of the siblings live close to the parent or have time available, then the question becomes how to divide the expense of hiring an in-home health aide or perhaps an assisted living facility, depending on the circumstances.

Good communication is probably the most important factor in making these decisions. Ideally, responsibilities will be divided in whatever way feels fair to everyone involved, and arriving at the best outcome depends on communication. Siblings should be encouraged to share exactly what they feel they should contribute and why. Factors such as an individual’s family income or work schedule are legitimate concerns that may play into decision-making. Feelings about this should be stated plainly so that later resentments can be avoided. Siblings should try their best not to let old sibling rivalries get in the way. Adult siblings caring for an elderly parent are taking on new roles, and they are best served by not replaying old ones.

In addition to family income and work schedules, siblings should consider each other’s particular skills. If one sibling is a more frugal money manager, it may make sense for him or her to hold the power of attorney for the parent. Someone with experience as a caregiver may do the best job handling day-to-day care. One fact that should not be forgotten is that caregiving is valuable and important work. Siblings who are not involved with day-to-day care may not be aware of just how much work is involved. The caregiving sibling should not be afraid to speak up and share with the others how much time goes into giving care for their parent. It can be easy for a sibling that is contributing more time or contributing more money to feel that his or her contribution is unfair or is going unrecognized. Full and frank discussion is the best solution.

Finally, as with most things, careful planning will save a lot of headaches. Just as mom or dad’s schedule of doctor’s appointments and daily medications needs to be kept track of, so should the finances be kept in careful order. An estate planning attorney or financial adviser can be invaluable in preparing a budget that accounts for the cost of different types of care that may be needed.

Estate Planning & Elder Law: What You Should Be Aware of If You Live in New York and Florida

Thursday, October 10th, 2013

Many New Yorkers retire in Florida, and many others choose to spend the winter months there while maintaining a residence in New York. As part-time New Yorkers and part-time Floridians, retirees have the best of both worlds. But living in two different states can present certain complications when it comes to estate planning and elder law.

One important consideration is where your legal residence will be, which can be important for purposes of estate taxes. Where you spend the most time may not be as important as where you are registered to vote, what state issued your driver’s license, and what address you list on tax documents.

Your will and any trusts should be tied to the state where you are a legal resident. However, if you own real estate in another state, you should have your estate planning attorney make sure that you do not need additional documents to transfer the property when you die or to manage it if you become incapacitated.

It is also important to make sure that documents such as a living will and health care power of attorney are valid in both states. If you happen to be traveling through another state and are hospitalized, out-of-state documents will probably not cause a problem. But if you spend a significant amount of time in another state, it is advisable to be sure that such documents comply with the laws of both states. If you spend a good deal of time in a state far away from close family members, then you may also want to consider naming a local family member or trusted friend in health documents, so that someone can get to a hospital quickly in the event of an emergency.

Littman Krooks is well-positioned to help you with these matters. Because so many of our clients live both in New York and Florida, we have partnered with Solkoff Legal, P.A. a leading Florida elder law firm, to offer superior estate planning and elder law services to residents of both states. Contact us for more information. Click here to read more about our alliance with Solkoff Legal.

 

For more information about our legal services, visit www.elderlawnewyork.com.

 

Estate Planners Find More Clients Are Raising Grandchildren

Monday, October 7th, 2013

Financial advisors and estate planning experts are reporting that they are seeing an increase in the number of grandparents who are helping to raise their grandchildren. For many, that added financial responsibility means that plans for retirement must be put on hold.

More than 2.6 million grandparents were raising grandchildren below the age of 18 as of 2011, according to the U.S. Census. Many households are disrupted due to underemployment, divorce, mental health or substance abuse issues or chronic illness. When adult children are not able to fully parent their own children, other family members often step in, and many times, custody of the children falls to the grandparents. That addition to the household means that more funds are needed for food and clothing; add in school supplies, sports and leisure activities and even basic entertainment, and a comfortable budget for two retirees can quickly be stretched to the breaking point, not to mention the emotional toll.

Merrill Lynch ran a survey of retirees in early 2013. Thirty-five percent of responding grandparents stated that they expect they will have to provide financial support for their grandchildren: 43 percent of those respondents stated that they will be providing financial support; 38 percent believe they will be paying for housing; 30 percent will be paying for education; and 25 percent are planning to pay for health care.

Even when grandparents are not shouldering the entire burden, many grandparents report that they are helping to “bridge the financial gap,” paying for some items or providing ongoing monthly funds to help make ends meet. And when some families are more financially secure than others, issues of resentment can build. That and the tax implications of gifts and estate tax is why so many estate planning attorneys strongly suggest that families look into setting up trusts with specific guidelines.

In addition to looking at financial estate plan issues, any grandparents who are parenting or co-parenting grandchildren should speak with an attorney to make sure guardianship issues are formalized. A guardianship that must be declared through the courts during an emergency is unpleasant for everyone involved.

 

For more information about our legal services, visit www.littmankrooks.com.

For End-of-Life Care, Many Must Choose Between Nursing Home and Hospice

Tuesday, January 15th, 2013

According to a recent study released by the University of California, San Francisco, close to one-third of elderly people needing end-of-life care enter a nursing home. The issue? Nursing homes are not always the best environment for end-of-life care. A nursing home is equipped to oversee many basic elements of end-of-life care, including IV hydration and monitoring vital signs, but staff may not be adequately responsive to issues such as pain management, palliative care and support for bereaved family members.

The study used data from 1994 through 2007 from the National Health and Retirement Study. Researchers examined more than 5,000 cases of people who lived independently. Some 30 percent of individuals older than 85 eventually used their Medicaid skilled-nursing facility (S.N.F) benefit within the final six months of their life.

Care options are limited for those with tight budgets. While some end-of-life nursing home residents can receive hospice care in a nursing home, Medicare seldom reimburses for the room and board provided by the facility as well as hospice care. Residents must choose – and nursing home room and board can add up to hundreds of dollars per day.

An individual can choose to have home hospice care and use those Medicaid benefits, but if there are any “medically complex” issues, home hospice may not cover those expenses. Additionally, home hospice assumes there are family members and a home where care can be given. An individual who needs 24-hour care may have to choose between skilled care and hospice care. But for many, the need of 24-hour care outweighs other options. Complicating matters further is the way Medicare restricts coverage: if an individual is hospitalized for a diagnosis unrelated to the hospice diagnosis, he or she can often get nursing home and hospice coverage.

For more information, visit www.elderlawnewyork.com.

Elder Law Attorney Bernard A. Krooks to Speak at Heckerling Institute

Monday, January 7th, 2013

White Plains, New York (January 10, 2013) - Bernard A. Krooks, Esq., a founding partner of Littman Krooks LLP, will be a guest speaker at the 47th Heckerling Institute on Estate Planning on January 14, 2013, at the Orlando World Center Marriott Resort and Convention Center, in Orlando, Florida.

Mr. Krooks will be speaking about the “graying” of Baby Boomers and their need for elder law services. Mr. Krooks will also discuss “Later Life Law” and how elder care attorneys can assist their clients with Medicaid options as well as other areas of elder care planning including retirement accounts, long-term care insurance and tax considerations and the use of trusts in elder law and special needs planning.

The Heckerling Institute on Estate Planning is known as the premiere U.S. conference for estate planning professionals, including attorneys, accountants, trust officers, insurance advisors and wealth management professionals. The program offers lectures and special sessions with comprehensive coverage of estate planning techniques and strategies, designed to allow attendees to customize their educational experience.

Mr. Krooks has been included among The Best Lawyers in America® for each of the last six years. He has been selected as a “New York Super Lawyer” since 2006. Krooks has received his AEP accreditation from the National Association of Estate Planners & Councils. He is a member of the Real Property, Probate & Trust Law Section and Tax Section of the American Bar Association. He is a sought-after expert on estate planning and elder law matters and has been quoted in leading publications such as The Wall Street Journal, The New York Times and Forbes, among others.

About Littman Krooks

Littman Krooks LLP provides sophisticated legal advice and the high level of expertise ordinarily associated with large law firms along with the personal attention and responsiveness of smaller firms. These ingredients, which are the cornerstone of effective representation and are necessary to a successful lawyer/client relationship, have become the foundation of the firm’s success.

Littman Krooks LLP offers legal services in several areas of law, including elder law, estate planning, special needs planning, special education advocacy, and corporate and securities. Their offices are located at 399 Knollwood Road, White Plains, New York; 655 Third Avenue, New York, New York; and 300 Westage Business Center Drive, Fishkill, New York. Visit the firm’s website at http://www.elderlawnewyork.com.

Impending Changes Would Make Estate and Gift Taxes Apply to Many More Americans

Wednesday, December 26th, 2012

The rules governing taxes on gifts and estates are set for major changes at the end of the year unless Congress steps in.

The taxes, which currently concern mainly the very wealthy, will soon ensnare far more people if scheduled reductions in exemptions are allowed to go through. The exemption level for each tax is currently $5.12 million and is set to plunge to $1 million.

The lifetime exemption on gift taxes is also scheduled to make an identical drop.

The impending changes have prompted a frenzy of activity among wealthy Americans eager to make gifts and create trusts under current law, filling the calendars of estate planning attorneys and financial planners nationwide.

The estate tax rate is also scheduled to increase from a current top rate of 35 percent to a new top rate of 55 percent.

According to Congress’ Joint Committee on Taxation, the change in estate tax exemptions would make approximately 55,000 estates subject to the tax next year, compared to fewer than 4,000 estates under current law.

President Obama’s budget proposal of February 2012 called for an estate tax exemption level of $3.5 million and a top rate of 45 percent. It did not contain a recommendation for gifting exclusions.

Estate and gift taxes are not the only ones scheduled to change. The tax exemption for generation-skipping transfers and trusts would likewise drop from its current $5 million to $1 million under current law. In addition, trusts of this type currently can shelter assets from taxation for an unlimited number of generations, but President Obama has proposed limiting the effect to 90 years.

Most experts predict that Congress will not resolve the matter before the end of the calendar year, but any compromise reached in 2013 could be retroactively applied to January 1.

For more information, visit www.elderlawnewyork.com.

Planning to Retire Soon? Create a Retirement Checklist

Monday, July 16th, 2012

If you are considering retiring within the next five years, now is the time to create a retirement plan.  Many seniors say they wish they had planned more carefully for retirement.  There are several things you can do now to make sure your legal and financial affairs are in order when you retire.

Define Your Financial Goals

Naturally, one of the most important considerations in planning for retirement is safeguarding your financial security.  That means defining what you expect your lifestyle to be during retirement, and how your financial goals will be met.  You will want to consider factors such as how you will allocate money from your savings to supplement your retirement income, the possibility of rising health care expenses, and the effect that inflation may have on your purchasing power.

Your retirement plan will need to include a budget and an asset allocation strategy, and you will need to consider how to balance different sources of income and benefits, including Social Security, Medicare, and your own assets.  If you are employed, one thing you can do to maximize your savings is to invest as much as you can in your 401(k) before you retire.  Your employer can be a valuable source of information on how best to make use of your 401(k), and what benefits you will receive in retirement.  If you are married, then you and your spouse should create a joint retirement plan.

Create an Estate Plan

If you do not already have an estate plan, now is the time to create one.  Before retirement, you will want to be sure that you have taken the necessary steps to ensure that your assets will be distributed according to your wishes, through the execution of a will, and the establishment of any trusts that would benefit you and your family.  It is also important to establish a durable power of attorney, designating a person to make decisions for you in the event you become incapacitated.  Through a living will, you can issue specific instructions for what is to be done in certain medical situations.  An estate planning attorney can help you create a holistic plan for the management of your assets.

Retirement is something to look forward to, and something to plan for carefully.

To learn more about our elder law services, visit www.elderlawnewyork.com.

It’s Time to Protect Your Family and Your Future

Friday, April 20th, 2012

Estate planning is a financial process that can protect you and your family, and is a very important component of your overall financial planning. April is National Financial Literacy Month to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.

Without an estate plan when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.

The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.

Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.

Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.

Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now.

CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.

Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.

If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.

You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.

There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.

Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.

To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.

Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.

2. GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:

  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?

Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

Try sketching a picture or flow chart of your existing estate plan. Review your appointees:

  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney – Property Management
  • Advanced Health-Care Directive or Health-Care Power of Attorney

ESTATE PLANNING ALERT : On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (The 2010 Tax Relief Act) into law. Estate and gift tax laws have been reinstated along with many new temporary estate and gift tax provisions that will end on December 31, 2012 unless Congress extends or makes them permanent.

Estate Tax Exclusion & Top Rates:  Establishes an estate exclusion amount at $5 million and the top estate tax rate at 35%; indexes the $5 million exemption for inflation for decedents dying after 2011.

Portability:  Beginning for taxpayers dying after Dec. 31, 2010 the estate tax exclusion becomes “portable” between spouses. This means that the surviving spouse’s exemption is increased by any exemption not used at the first spouse’s death.

Check with your financial advisors for updated information.

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.

These materials are provided as a public service by The NAEPC Education Foundation for “free-use” on websites, newspapers, newsletters, magazines, and other media broadcasts during the months of April and October as it relates to National Financial Literacy Month and National Estate Planning Awareness Week. For additional information or materials contact us at The NAEPC Education Foundation.

To assist with your estate planning, follow this link  at www.estateplanninganswers.org/protect-your-family-and-your-future/ to get a complimentary copy of the Your financial PARTNER “Estate Planning Location Sheet,” in Excel worksheet format. For more information on estate and financial planning visit www.estateplanninganswers.org/category/financial-planning/personal-financial-management-system/ or visit our website at www.elderlawnewyork.com.