You may look at estate planning as a shuffling of paperwork. There are those who adopt this perspective, but as estate planning attorneys, we look at things a different way.
While it is true that we help clients through the creation of certain types of documents, the human element is what it is all about to us. Estate planning attorneys protect families, and we preserve legacies.
This is done in various different ways, and there are different approaches that can be taken, because each family is unique. When it comes to high net worth Long Islanders, wealth preservation is important, because estate taxes can have a heavy impact.
There is a federal estate tax that packs a punch with a 40 percent maximum rate. It is possible to transfer assets to your spouse tax-free using the unlimited marital deduction, but transfers to others can be subject to taxation.
During the current calendar year, the first $5.45 million that is changing hands can be transferred free of taxation. This $5.45 million figure is called the credit or exclusion. The portion of an estate that exceeds this amount is potentially subject to the federal estate tax.
There are a number of states in the union that also impose state-level estate taxes. The state of New York is one of the 14 states that has a state-level estate tax. At the present time, the New York state exclusion is lower than the federal exclusion. This means that your estate could be subject to taxation even if it does not exceed $5.45 million in value.
Until April 1st, the New York state estate tax exclusion is $3.125 million. At the beginning of April, it will go up by $1.0625 million, and it will increase by that same amount at the beginning of April in 2017. At that time, the state-level exclusion will be $5.25 million.
The $5.45 million federal exclusion that we have this year is in place after a series of inflation adjustments. A $5 million benchmark was established for 2011, and there have been adjustments since then, and there will probably be slight adjustments over the next couple of years.
On New Year’s Day in 2019, the New York state estate tax exclusion will be raised to match the amount of the federal estate tax exclusion that is in place at that time.
Estate planning attorneys advise clients who are going to be exposed to death taxes. There are various different ways that you can facilitate tax efficient transfers. If you take the right steps, you can preserve what you have earned for the benefit of your loved ones.
Nursing Home Asset Protection
Taxation can negatively impact your family, but there is another looming threat that many people are not aware of, and it can shatter your legacy. The majority of elder Americans will someday need living assistance, and many will reside in nursing homes.
Nursing home care is exorbitantly expensive right now, and costs have been rising year-by-year. If you require nursing home care in 20 or 25 years, the numbers can be truly staggering. Medicare does not pay for long-term care, so this is an issue that is quite relevant.
If you do not take the right steps in advance, everything that you have always intended to leave to your loved ones could wind up in the coffers of a nursing home.
Fortunately, there are steps that you can take to protect your assets from potentially devastating nursing home costs. However, you have to act in advance in an intelligent and informed manner.
Medicaid will be the solution for many, because this program does pay for long-term care. Program rules are complex, and estate planning attorneys help clients who want to position their assets optimally with future Medicaid eligibility in mind.
You may be concerned about the financial habits of a loved one on your inheritance list. Someone who is not a good money manager could squander his or her inheritance.
Estate planning attorneys can provide solutions when these circumstances exist. There are asset protection strategies that can be implemented to safeguard an inheritance that you would like to leave to a loved one who could be described as a spendthrift.
Contact Our Firm
We have just scratched the surface in this brief blog post. If you would like to discuss your own estate planning objectives with a licensed professional, our firm would be glad to help.
Our firm provides personalized attention, because each situation is unique. Your estate plan should be tailor-made to satisfy your specific objectives.
You can call us at (631) 265-0599 or send us a message through our contact page to set up a consultation.
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