Updating your estate plan

Routine Maintenance. We do it with our cars and hopefully we do it with our computers as well. But routine maintenance is one of those things that can get forgotten when we get get too busy.

An estate plan also needs routine maintenance but often people think it’s one and done once you create a plan. However, that is far from the truth. Estate plans need to be revisited every so often.  The tax laws are always changing and only experienced attorneys like Jeffrey Weinstein and tax professionals will be able to say whether an estate plan is taking full advantage of the current tax laws.

Even knowing this, most people don’t make an annual appointment with their attorney. In fact, a lot of people never make any follow-up appointments. This is a big mistake. We can’t begin to count the number of clients we have had who were upset Uncle Sam got more than they would have liked when a loved one passed away, or, when the youngest grandchild was completely forgotten when their beloved grandparent passed away.

To avoid such situations, we recommend making an estate planning appointment each time someone in the family is born, dies, gets married, or gets divorced. This will ensure no loved ones are left out or inadvertently left in. It is also a good idea to update a plan when a child mentioned in the plan reaches adulthood because children and adults have such different needs.

If one of these big life events hasn’t occurred in the past five years, you should schedule an appointment for an estate planning tune-up anyway. We call it the five-year rule. Checking in on an estate plan every five years is necessary if you want to take full advantage of the ever-changing tax code.

An ounce of prevention is worth a pound of cure, and that also applies to estate planning. If you can’t make it yearly you should most definitely make it in for a check-up at least every at least every five years. Call us at (212) 693-3737 to schedule your “check up.”

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Education trusts for grandkids?

If you want to leave money for your grandchildren you can easily do that in your will. But what forms(s) should it take? The obvious answer is to set up a trust

What you could do is set up what they call a pot trust.  A pot trust is basically a pot of money from which each of the beneficiaries can request funds. It’s a simple, but you need to be careful if you intend for all of the beneficiaries to be treated the same.

Every beneficiary can dip into the pot of money that’s in that trust and some may get more than another. That’s all well and good if that’s what you intended, but unequal distribution can lead to ugly fights.

As an example, one beneficiary may go to Hunter College and the other might go to NYU. The one going to NYU might use up most of the trust before Hunter even starts college.

That’s where educational devices like a 529 plan come in.” A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.” 

Since a 529 is designed with education in mind, it is designed to be flexible and to address the changing educational environment. If you need help deciding, please contact us a 347-305-4262.

 

 

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You don’t have to be millionaire to have an estate plan

Aretha Franklin died without any kind of estate planning. Her estate was worth an estimated 80 million. But, since she had no advanced estate planning, after applying the federal estate tax exemption the estate will only be worth $68,800,000 and that is subject to 40% federal tax.

Now that valuation doesn’t include attorney’s fees, court costs and other costs associated with settling the estate. But what is known is that it will be worth a fraction of the 80 million.

So, you don’t have 80 million, but what you have worked for you want to pass along to your heirs without the government taking a huge cut, right? That’s where estate planning comes in.

What if you have debt? Creditors can go after that debt and the heirs who you bequeathed your money if the debt hasn’t been dealt with.

How to avoid such hassles? Here’s a list of what you should include in your estate plan to lessen the possible hassles.

  • Assign healthcare power of attorney 
  • Create a will
  • Review your beneficiaries for life insurance, investments etc.
  • Set up a trust(s)

Reviewing your beneficiaries is important especially if you assigned them years before. As an example, if you remarried you still might have your ex-spouse as a beneficiary and now you want your current spouse to be the beneficiary.

What happens if you get hospitalized and can’t make decision about your health and money? A healthcare proxy or healthcare power of attorney can make sure your wishes are carried out.

Suppose you have a sizable estate, maybe not millions but a nice chunk. How do you keep the government frtom getting their hands on it? You can set up a trust. A trust is managed by a trustee for a beneficiary or beneficiaries you choose. You toss the assets right into the trust and it bypasses probate court and the expenses associated with it.

These are just a few ways to shield your estate from the grabbing government hands. The Law Offices of Jeffrey Weinstein can help you manage your estate. Please call us at 347-305-8752 for a free consultation.

 

 

 

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Estate planning? Consult a professional

The internet offers many ways to create your own estate planning documents and you can take that route if you want to save money, but you are better off hiring a professional to insure all your documentation is legally valid.

There’s nothing wrong with saving some dough by drafting your own estate-planning documents. You can find templates for basic wills and such online or in bookstores. But that should be followed with a review of those documents by an expert to insure everything is in order

Massachusetts estate planner Leanna Hamill, told AARP that, “Ninety percent of the online estate planning documents I see don’t do what the people think they’re going to do. I’ve seen people use online documents, documents out of estate-planning books or documents borrowed from friends. But they screw up their estate plan because they don’t understand the legal and technical aspects of the documents.”

Hamill told AARP that she knows of one client who signed a deed transferring his house to a trust but hadn’t properly created the trust. Thus, the deed had no effect. Another client’s confusion over the term “beneficiary” resulted in the immediate transfer of all his property to his children and required him to pay them an annual income, leaving his wife in the cold.

So even though you can do it yourself, err on the safe  side and contact a professional like Jeffrey Weinstein @  212-693-3737 for a free consultation.

 

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Digital assets and your will

We’ve written ad nauseum about how less that half of Americans have a will. Well, almost that many also forget to include their digital assets in their estate plan.

Most Americans don’t keep track of their online assets like Paypal, Facebook, and merchant loyalty reward programs and chances are will forget to include them in their estate plans. By neglecting these things a it can cause hassles for beneficiaries, powers of attorney and executors.

One group of things that people tend not to think of are reward programs like frequent flyer miles. For example, Anthony Bourdain left his unused frequent flyer miles to his estranged wife and they were substantial. We suggest you write down all your digital assets including logins and passwords and store them when only someone you trust knows where they are.

If you find it all too daunting there are businesses popping up that will do it for you. One business is out of Durham, North Carolina called Back Up Your Life which their site says

We help you organize your life’s documents, details, and contingency plans. If you’re ready to be ready, let’s back up your life.

Then there are digital estate services, such as Everplans, which helps her clients by providing a digital archive of everything your loved ones need if you die or get into an accident and can’t communicate.

Among the things Everplans takes care of:

  • Wills, Trusts, and insurance policies
  • Important accounts and passwords
  • Info about your home: bills, vendors, etc.
  • Health and medical information
  • Advance Directives and DNRs
  • Final wishes and funeral preferences

 

 

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