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Estate Planning

Saturday, April 28, 2018

Weighing the Benefits and Dangers of the Durable Power of Attorney


A durable power of attorney is a document which gives someone broad powers over your financial affairs.  Especially as one gets older, this document becomes a necessary evil.  Why is it evil?  By its nature, a power of attorney gives control to a person of your choosing to transact business on your behalf.  It gives the power to deposit and withdraw funds, change beneficiaries on ones accounts, and even to liquidate funds.  If one becomes unable to handle his or her own financial affairs, whether it be due to a temporary or permanent physical or mental disability, it is imperative that someone take over this necessary function.
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Sunday, April 15, 2018

Florida Probate: Something to Avoid


 

While the probate process is usually quite simple and straightforward in New York, that is not the case in Florida.  What is probate and why does probate become necessary?  When a person passes away, there needs to be a legal mechanism for transferring assets from the deceased person to the deceased person's heirs.  Usually, that mechanism is through the use of a last will and testament, which then gets filed with the Court and the Court looks to see if the will was properly prepared and executed.  Of course, probate can often be avoided by transferring one's assets to a revocable living trust, and/or by having beneficiaries on one's accounts.  There are many reasons why the trust and beneficiary designations may not be the best choice.


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Saturday, March 10, 2018

Will Your New York Will and Other Estate Planning Documents Be Valid in Florida


 

Clients often ask me, when they are moving to the State of Florida, or considering such a move, whether the wills which they have prepared in New York need to redone.  Assuming the wills were properly drafted and executed in accordance with New York law, then the wills are valid in Florida, and in any other state for that matter.  While the execution requirements are more stringent in Florida, there is absolutely no need to redo one's New York wills, but one should be aware that when the time comes to probate the will, if that occurs in Florida, then the Court will request an affidavit from a New York attorney, stating that the will was executed properly in accordance with New York law.

While one's New York wills are valid for Florida purposes, probate is an entirely different issue.  If a former New York resident dies as a resident of the State of Florida, the law requires that the probate of the will occur in Florida.


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Saturday, February 10, 2018

Five Reasons Why it Can Be Extremely Dangerous to Put A Child's Names on Your Assets


Clients often think that putting their children's names on their savings accounts, brokerage accounts, real estate and other assets, will accomplish tax savings and protect the assets in the event they need long-term health care.  Nothing could be further from the truth.  While putting a child's name as a joint owner on an asset does avoid probate, the better option would be to name the child a beneficiary, which also serves the purpose of avoiding probate.

First, most assets are only protected for long-term health care/nursing home costs if the parents' names are removed entirely from the account or property.  Removing one's name completely, as owner, has adverse gift tax consequences, subjects one to the five-year look back for medicaid, and also means you lose total control over the assets.
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Tuesday, January 23, 2018

Important Changes to the Federal Estate and Gift Tax for 2018



The Tax Cut and Jobs Act passed by Congress and signed into law at the end of 2017 contains some very significant changes to the federal estate and gift tax laws. For one, the unified credit for estate and gift tax–the amount you can give cumulatively during your lifetime or which you can leave at your death without incurring an estate tax–was doubled.  The increased, inflation-adjusted exemption amounts to approximately $11.2 million for an individual, or a combined $22.4 million for a married couple, and are effective for estates of decedents dying, and gifts made, after December 31, 2017.
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Wednesday, January 10, 2018

Exploring the Many Advantages to Creating a Trust



Clients are often and understandably confused about the differences between irrevocable trusts and revocable living trusts, and the consequences they each have for asset protection, estate planning and taxes.

Those who advocate living trusts commonly lead people to believe that these trusts will reduce estate taxes and protect one’s assets in the event long-term health care is needed. While living trusts serve the purpose of avoiding probate, they do not protect your assets. Since you maintain control over the assets in your revocable trust, they are still considered available to pay for your health care needs.  Similarly, unless a living trust creates certain types of irrevocable subtrusts, it does not reduce one’s taxable estate since the person creating the trust maintains complete control.
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Thursday, December 21, 2017

Avoiding The Dangers of Transfer On Death And In Trust For Accounts



It is now permissible, in the State of New York, to have beneficiaries listed on brokerage and investments accounts, regardless of whether or not they are retirement accounts.  The designation is commonly referred to as a TOD, or transfer on death, designation.  With savings, checking and money market accounts held with banks, one is also permitted to list beneficiaries, with those usually referred to as “in trust for” accounts. 

The primary advantage of having TOD or “in trust for “ designations on one’s accounts is that one avoids probate, at least with respect to these accounts.  Joint ownership of accounts accomplishes the same purpose, but is more dangerous because the intended beneficiary immediately becomes a joint owner.
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Wednesday, December 13, 2017

How to Provide for Minor Children and Grandchildren



It is quite common for parents and grandparents to want to leave money to a person under the age of eighteen (18) years old (a “minor”).  Since a person younger than 18 can not legally inherit money, having a minor as a beneficiary on one’s accounts, regardless of how small in value the accounts may be, is quite problematic. 

Leaving money to a minor necessarily requires that the child’s parents (or some other adult) will need to petition a court to be appointed the minor’s legal guardian for purposes of accessing the funds left to the minor.  Needless to say, the court process will be a lengthy and expensive one.  Clients often list a minor child or grandchild as a beneficiary on their retirement account, annuity, or life insurance policy, intending to avoid probate and make it easy for the minor to collect the account, not realizing that doing so will make matters worse.
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Saturday, November 11, 2017

Estate Tax Repeal: Will it Really Happen?


As everyone is probably aware, part of the tax reform proposal before Congress is the repeal of the federal estate tax.  Clearly, it is not known if the estate tax repeal will in fact happen, but if it does, it will occur gradually.  What does one do in the interim?

Clients should not postpone their estate planning or even undo any estate planning they have already undertaken, on the assumption that the estate tax repeal will occur.  For one thing, if one passes away before the tax is repealed, assuming it is, then one's heirs may wind up paying a very sizable estate tax, which might have been avoided with proper planning.

Moreover, most states have their own estate or inheritance tax, sometimes referred to as a death tax.


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Wednesday, November 1, 2017

Estate Planning With IRAs


Clients often overlook their IRA accounts when doing estate planning, as they are aware that these accounts generally have beneficiaries and do not pass under their wills.  The reality, however, is that they are and should be a very integral part of developing an estate plan.

For one thing, the value of IRAs are indeed included in one's taxable estate and their inclusion may result in an estate tax liability at death.  Since IRAs can not be liquidated without adverse tax consequences, they are generally not the preferred method of paying estate tax obligations .

It is imperative that clients check the beneficiary designations on their IRAs.


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Thursday, October 5, 2017

The Benefits to Charitable Giving


 

Making lifetime gifts to charitable organizations, including many educational institutions that are registered as charitable organizations, offers many tax advantages.  Generally speaking, making these gifts permits one to take a deduction on one's income tax return.  Additionally, lifetime gifting removes assets from one's taxable estate.

In addition to making lifetime gifts, one can make provision in one's will or trust to leave money to charitable organizations, thus avoiding estate tax on those monies.  Often, if  a client has a taxable estate, it makes sense to leave some money to a charity instead of paying taxes to the federal and/or state government.


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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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