The field of estate planning is intimately intertwined with the elder law niche. You want to make sure that you facilitate effective postmortem asset transfers, but you should simultaneously prepare yourself for the eventualities of aging. Right now, the elder law field is very important, because the baby boomers are getting older. There are some 10,000 people applying for Social Security every day. An unprecedented number of people are attaining senior citizen status at the same time, so …
What Is a Qualified Personal Residence Trust?
A qualified personal residence trust can be useful when you are exposed to federal transfer taxes. There is a federal estate tax, and there is also a federal gift tax. These taxes are said to be unified by the Internal Revenue Service. Unification of Gift and Estate Tax When the estate tax was first enacted in 1916, there was no federal gift tax. As a result, people could just give gifts while they were living to avoid the estate tax. To close this loophole, a gift tax was put into place …
What Is the Generation-Skipping Transfer Tax?
You have to be concerned about preserving your wealth if you have been financially successful throughout your life. There is a federal estate tax that carries a hefty rate, and it can significantly erode the wealth that you are passing along to your loved ones. In 2014, the maximum rate of this tax is a robust 40 percent, so we are talking about a rather large bite. This is not the only federal transfer tax. If it was, you could give gifts while you are living to avoid the estate tax. To …
Estate Planning for Small Business Partners
There is no one size fits all estate plan, because everyone is in a different situation. It is not always as simple as drawing up a last will splitting up a pie that is going to be easily divisible. For example, if you are a small business partner, you will naturally have a number of concerns that company employees will not have to address. As a small business partner you must decide what will happen to your share of the business after you pass away. You may want to spread the value of …
What Is the Difference Between a Guardianship and a Power of Attorney?
You should prepare for the contingencies that you may face toward the end of your life when you are planning your estate. There are some realities that sober minded individuals must confront, and some of them may not be particularly pleasant. At the same time, you must address all eventualities if you want to be optimally prepared for the future. With this in mind, let's look at the matter of adult guardianship. Court Appointed Representative A very significant percentage of senior …
When Would I Want To Use a Special Needs Trust?
To effectively plan your estate, you must carefully consider the specific needs of each person on your inheritance list. There are numerous different ways to facilitate asset transfers. The best course of action will vary on a person by person basis. When you act in an informed manner, you can prevent unintended negative consequences. With this in mind, we would like to explain the value of special needs trusts. Government Benefit Recipients Many people who have disabilities are enrolled …
How Do You Stretch an IRA?
There is an old sing-along about this bone being connected to that bone. When it comes to financial planning, there is a similar type of interconnectedness. Your retirement plan is going to lead to a plan that addresses the expenses that you may face during your twilight years. The planning will ultimately culminate in the distribution of your estate to your loved ones. Retirement planning is typically going to include an individual retirement account. When you contribute into an individual …
Is a Revocable Living Trust Only for the Rich?
All trusts are not created equal. There are different trusts that are utilized to accomplish varying different objectives. Many people are under the assumption that trusts are only useful for the wealthy, but this is not the case. Irrevocable Trusts High net worth individuals often have estate tax concerns. There is a federal estate tax that carries a $5.34 million exclusion. If your assets exceed this amount, you must take steps to gain estate tax efficiency. It should also be noted …
June Seminars to Cover Living Trusts and Medicaid Asset Protection
Knowledge is power when you are planning your estate. When you have a thorough understanding of your options, you can make informed estate planning decisions. We make a concerted effort to disseminate sound information to our neighbors in and around Long Island. During the month of June we will be offering a series of seminars that will cover living trusts and Medicaid asset protection. These seminars are being offered free of charge, but we do ask that you register in advance so that we …
Will My Heirs Be Forced to Pay an Inheritance Tax?
People can sometimes get confused about taxes on asset transfers. In this post we would like to provide some clarity as we look at the difference between an inheritance tax and an estate tax. Inheritance Tax An inheritance tax would be levied on asset transfers to each nonexempt inheritor. Fortunately, there is no inheritance tax on the federal level. There are a handful of states in the union that impose state-level inheritance taxes. Our firm practices in the state of New York. There …
What Assets Can I Keep When My Spouse Applies for Medicaid?
Long-term care is a very big factor to consider when you are planning ahead for your senior years. The United States Department of Health and Human Services has a website called LongTermCare.gov. There is a lot of good information on the site. When you visit the site, a particular statistic jumps out at you: approximately 80 percent of people who are turning 65 will eventually need living assistance. We are talking about a likelihood, not a remote possibility. If you have worked for any …
Is Probate Always Required?
Many people are not aware of the existence of probate. This is a legal process that takes place under the supervision of the Surrogate's Court in the state of New York. If you were to pass away without any type of estate planning documents at all, the court would utilize intestate succession laws to determine the way that your resources should be distributed. When a last will is used, the will must be admitted to probate. Generally speaking, any time you pass away in direct possession of …
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