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Estate and Business Planning Legal Blog

Sunday, January 31, 2016

The Value of Long-Term Health Care Insurance in New York

 

Long-term health care insurance is essential for anyone who has assets to protect and does not have the financial ability to pay well in excess of $10,000 per month for a nursing home without jeopardizing one's financial stability.  This is especially true when one spouse becomes ill, and the other is able to live at home but also needs to maintain his/her own standard of living.  While no one wants to go to a nursing home, sometimes it is inevitable.  More commonly, a person will go to an assisted living facility or have  a health professional take care of him/her at home, with the nursing home being the absolute last resort.  Unfortunately, while not as expensive as nursing home care, both home care and assisted living are quite expensive.  In New York, where the cost of care is especially high, purchasing long-term care insurance should be a serious consideration for anyone over the age of 50.


Friday, January 22, 2016

Beneficiary Designations for Retirement Assets

 

While it is not necessary, nor necessarily desirable, to name beneficiaries on one's savings, checking and investment accounts, it is essential that retirement accounts have named beneficiaries.  Retirement accounts include IRAs, 401ks, TDAs, 403(b) accounts, and the like.  If one does not name an individual beneficiary or beneficiaries, and these accounts pass to one's estate, income tax will be due almost immediately, at the estate income tax rate.  The tax rate for an estate is usually substantially higher than the individual income tax rate.  If an individual is named as beneficiary, that individual can draw the money out over time, paying income tax over time instead of immediately, and usually at a lower rate. An annuity is also an asset which should have beneficiaries named, as the growth in the annuity is taxed at ordinary income tax rates, rather than being treated as capital gains. 

  

 

 

 

 IRS Circular 230 disclosure: We inform you that any tax advice contained in this communication is not intended or written to be used, and may not be used by your or anyone else for the purpose of avoiding penalties imposed under the Internal Revenue Code.


Saturday, January 9, 2016

Negotiating the Commercial Lease

Business owners often believe that the commercial lease is standard and that the services of an attorney are not necessary.  While commercial leases are usually in a somewhat standard form, there are many important items that deserve special attention and can be negotiated. For example, it is important to obtain from a landlord the ability to assign the lease or sublet space, in the event the business owner experiences financial difficulties. Additionally, provisions dealing with repairs, the condition of building systems, annual rent increases and personal guarantees are not etched in stone and can be modified.  In short, there are many concessions that can be obtained from a reasonable landlord, concessions which will save the business owner a good deal of money.  It certainly behooves one, then, to obtain the services of an attorney who is skilled at negotiating leases. 


Friday, December 4, 2015

How to Avoid Probate

 

A very common misconception is that probate is to be avoided at all costs.  While the probate process in some states can be long and arduous, probate in New York, if handled by a competent attorney, is usually quite simple.  One advantage of going through probate is that the Courts oversees the process, to some extent, and so it forces the parties involved to do the right thing.  Having a will which goes through probate also allows the easy creation of trusts for minor children and it can provide for the distribution of assets in the event of the death of a beneficiary.

If one desires to avoid probate, preparing a revocable living trust is one option.  Another option is to make sure that all of one's liquid assets have beneficiaries listed on them, so that at death the assets will pass directly to the beneficiaries without court intervention.  Clearly, this can not be done with real property. One should take care, however, in naming beneficiaries, to make sure they are all competent adults.  One should never list minor children as beneficiaries, as that causes a good deal of legal complications.  Moreover, problems are created when a beneficiary listed on an account predeceases the owner.  


Thursday, November 19, 2015

Acquiring Computer Technology: The Need to Negotiate Your Contract


Many business owners and managers feel comfortable negotiating the general terms of computer agreements. Often, the purchase or rental of computer equipment or software seems like any other acquisition of office equipment.  The stakes, however, are dramatically higher when computers are involved.  

Whether you are leasing or purchasing the software or hardware, having software developed for you, or simply seeking a service contract for an existing system, one or more contracts will be offered for your review and signature.  The contracts are often lengthy, detailed and technical, yet appear to be quite “standard”.  Generally, the company seeking to sell its product or service will give you the impression that the form of contract is one which is universally employed, that review and execution is a mere formality, and that the provisions are not negotiable.  This may be especially true when the company offering the contract is a large and established one.

There are many reasons for seeking the advice of an attorney prior to the execution of a computer contract.  Clearly, if your business depends or will depend heavily on computers, then any malfunctioning of the system will seriously affect your operations.  Moreover, the acquisition of computers often entails a large outlay of capital.

Certain topics covered by the typical computer contract are crucial, and the manner in which they are handled can either save you a good deal of money, time and anxiety, or they can cost you dearly.  For example, the commencement date of the contract or the time at which the system is “accepted” by you should not occur unless and until the system has been installed and is operating properly.  The time period for implementing the system should be specified, as well as your recourse if the schedule is delayed.  Perhaps more importantly, you should be assured that technical assistance will be provided.  If you should experience a problem with the system, you do not want to rely on a company which simply offers telephone assistance that is offered on a “best efforts” basis.  You want to know that you will receive assistance within a 24-hour or 48-hour period.

In summary, computer contracts are not as standard nor simplistic as they may first appear.  Even a cursory review by an attorney knowledgeable about computer contracts can save the business owner a great deal of money, time and trouble.


Saturday, October 17, 2015

Second Marriages: The Need for Prenuptial Agreements

 

Second marriages create special issues for estate planning.  In the absence of a prenuptial agreement, the new spouse is entitled to inherit, generally, one-third (1/3) of the estate of the other, regardless of what the spouse's will dictates.  This right is referred to the right of election.  It was designed to prevent one spouse from leaving all assets to a friend or lover, thus leaving the widow or widower with nothing, causing financial distress.  If one dies without a will and is married, the new spouse is entitled to one-half (1/2) of the estate

  Especially if one has children from a prior marriage, it is important to consider entering into a prenuptial agreement, so that the children are not left to inherit  a smaller portion of the estate.  Of course, a prenuptial agreement will also serve the purpose of protecting one's assets in the event of  a divorce, especially if one goes into a second marriage with substantial assets.


Wednesday, September 30, 2015

The Importance of Employee Handbooks

 

It is often a good idea for a business to develop an employee handbook, which sets forth the company's policies regarding vacation, sick leave, holidays, benefits, and the like.  The advantage of putting this type of information into one handbook, which is given to all employees, is that you are keeping workers abreast of their benefits.  It is also a good place to state what is expected of them, in terms of hours, performance, and dress.  An employee handbook also usually sets forth the company policy on terminations, retirement and severance pay.   A well written handbook will contains an agreement by the employee, which should be signed by employees upon hiring, not to compete with the business of the company or  solicit customers and it requires them to keep proprietary information confidential. 


Saturday, September 19, 2015

Choosing an Executor Under Your Will

One of the most important decisions clients need to make, when preparing their will, is who to choose as Executor of their estate.  An Executor is the person who will be responsible for collecting assets, paying taxes and other expenses, and then distributing what is left.  If there is a home, the Executor will also take care of selling it, if that is the wish of the testator (the person making the will).  The Executor's role, essentially, is to carry out the stated wishes of the testator.

Usually, if there is a spouse, the testator's spouse is the primary Executor.  If one has children, they are usually next in line.  It is usually ill-advised to have more than two Executors acting at the same time, since it is very cumbersome and inefficient to have more than two people having to act together.  If a client has two children, it is  difficult to choose one over the other, unless one of the children is disabled, irresponsible, or immature; therefore, it is common to name both children.  When one has more than two children, it is imperative that one child be designated the primary, with the others as back-up.  While many parents choose based on age order, it is usually best to choose the child who is most responsible and least likely to cause or exacerbate family tensions. 

 


Friday, September 4, 2015

Making Gifts in Order to Avoid Estate Tax

 

Federal law allows one to gift up to $14,000 per year to as many individuals as desired, without any adverse gift tax consequences and without the filing of a gift tax return.  Certainly, this is a very effective way of reducing one's estate and, therefore, reducing or even eliminating the estate tax.  In addition to this annual gift tax exclusion, one can pay medical and educational expenses for anyone, in an unlimited amounts, provided the payment goes directly to the institution. Lastly, these annual gifts can be used to fund a 529 college plan for children or grandchildren, and you can even make these annual contributions for up to 5 years in advance.

Surely, gift giving can be quite effective in reducing one's estate, assuming the donor is comfortable with this.  One caveat, however, is that New York law was changed relatively recently so that  the value of any gifts made within three years of death falls back into the taxable estate, for New York State estate tax purposes.  Moreover, these annual gifts may trigger a look-back period for medicaid eligibility. 

 

 

 

 

IRS Circular 230 disclosure: We inform you that any tax advice contained in this communication is not intended or written to be used, and may not be used by your or anyone else for the purpose of avoiding penalties imposed under the Internal Revenue Code.

 


Wednesday, August 19, 2015

Investing In Long-Term Care Insurance

 

Clients are often reluctant  to spend money to purchase long-term health care insurance.  While that is understandable, if one can afford the cost and is healthy enough to obtain the insurance, it is indeed a very wise investment. With nursing homes currently costing in excess of $10,000 per month in the metropolitan New York area, it is difficult for all but the very wealthy to continue to pay that cost out-of-pocket.  The only option, besides paying for the care out of one's own funds, is to use long-term care insurance, or to divest oneself of essentially all of one's assets. If there is a spouse at home, the cost of such care can severely impact the lifestyle of that spouse.   Having long-term care insurance can certainly alleviate the financial and emotional pressure caused by the need for long-term care.


Sunday, July 26, 2015

Terminating an Employee: How to Minimize Litigation

 

 

Terminating an employee is always a difficult job for an employer.  One of the biggest concerns an employer may have is that the employee will sue the company for wrongful termination.  There are some things an employer can do to reduce the chances of litigation.  First, the company should have a clear, written policy regarding termination, including procedures to be followed.  Someone at the company should be responsible for clearly and methodically documenting an employee's poor performance or wrongful behavior.  Occurrences should be reduced to writing and the employee should be promptly notified and/or warned,  in writing.  Additionally, it is often helpful to offer the employee some amount of severance pay and have that employee sign a release, promising not to bring legal action, as part of the severance package.

  


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At the Law Office of Angela Siegel, we are pleased to offer legal assistance to clients located in Nassau, Suffolk, Queens, Kings and New York Counties specifically but not limited to Garden City, Jericho, East Meadow, Mineola, Syosset, Roslyn, Cedarhurst, Woodmere, Hicksville, Plainview, Merrick, Wantagh, Bellmore, Rockville Center, West Hempstead, Little Neck, Douglaston, Bayside, Flushing, Forest Hills, Astoria, etc., as well as clients located within the state of Florida.



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