Estate planning mistakes

These days 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. We suggest you not do the following.

Don’t consult an expert

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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Estate planning, not just a good idea.

End-of-life planning isn’t fun.  In fact, it’s a drag. But it’s an important aspect of managing your assets and protecting your family. That’s why it’s surprising that 6 out of 10 Americans don’t have estate planning documents, much less a will.

Surveys show only 42 percent of U.S. adults currently have estate planning documents such as a will or living trust. For those with kids under 18, it’s even lower, just 36 percent.

People don’t like thinking about death especially their own.That study was conducted in January by Princeton Survey Research Associates International, who asked 1,003 adults whether they currently have estate-planning documents in case of their death, and if not, why not?

Debbi King, author of “The ABC’s of Personal Finance” says,  “This is the ‘I’m going to live forever’ theory. No one literally thinks that, but we all want to believe we are going to live until our 80s or 90s so we don’t think we need a will right now. This isn’t true, of course. We all have an expiration date and no one knows exactly when it will be. The best thing you can do for your loved ones is have a will now.”

The Law Offices of Jeffrey Weinstein is here to help you with all your estate planning needs. Call us for a free consultation.

 

 

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Inheritance laws in New York

New York is one of 12 states that tax estates of decedents people who owned property in the state.  Now besides that, there are other things you need to know when estate planning.

New York doesn’t charge inheritance tax, but the estate tax comes with one big provision. Though December 31st of this year there is a  $5.5 million exemption which means if the value of the estate is less than $5.5 million, the estate tax is waived.

That tax is in addition to the federal estate tax that hits individual estates worth more than $11,180,000 between gross assets and prior taxable gifts to pay within nine months of the individual’s death. You can get a six-month extension. But chances are you don’t have an estate worth $11 million. Only a few thousand people do.

New York estate property categories

There are only two categories in New York: personal property and real property, Real property is what you probably think it is; land and houses. Personal property is everything else. New York is not a community property state so the surviving spouse doesn’t automatically inherit the deceased’s property.

It does, however have what they call  a spousal right of election when deciding on inheritances for spouses. This law states that should a spouse pass away, his or her spouse will receive an “elective share” of $50,000 or one-third of the decedent’s estate. Should a spouse not receive this elective share, he or she has the right to file for it as long as it’s within a six-month window after an executor for the estate has been named.

Importance of a will 

If you die with a will in New York things are normally pretty straight forward, but it will still need to go through probate and people can challenge the will. There are ways to avoid probate and the Law Offices of Jeffrey Weinstein can help you avoid probate.

The State  entitles surviving spouses who have disinherited them to a piece of their estate. But this is limited to non-probate assets, such as property held in joint tenancy or a jointly held brokerage account paid on death to beneficiaries.

Dying without a will

An administration proceeding is the most common legal event that occurs in New York if you die without a valid will, but you own property. If when you pass away you don’t have a will, your estate consists of either jointly-owned or no real property, and your personal property is worth less than $30,000, you must file as a small estate.

Without a will, if you only own real property, it goes to your nearest relative.

There are other issues involve in estate planning and the law offices of Jeffrey Weinstein  347-305-8752 can help you navigate the process to lessen the hassle for you and your heirs.

 

 

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Financial planning for special needs family members

The American College of Financial Services in Bryn Mawr, PA estimates the average cost of raising a child from birth to age 18 is about $250,000. But raising a child with special needs can easily cost double that amount. Having a plan with the right professionals and strategies in place can help parents tackle the financial and non-financial challenges associated with providing care for their special needs child.

The first thing you need to do is assemble a team. Working with a team of different professionals can help parents manage both the financial and non-financial aspects of providing care. Consider working with the following:

Caregiver: While family often provides care for children with special needs, working with a caregiver can help manage the challenges of providing care and addressing everyday responsibilities. The cost will be commensurate with the level of care needed so determining the need is important when creating a budget for care.

Attorney: An attorney specializing in estate planning can create a special needs trust which will protect assets for a beneficiary with special needs while preserving the ability to qualify for government programs. Having an updated and living will with the names of a guardian and trustee are important in making sure care is provided in accordance with your wishes. A letter of intent can also be a helpful document for caregivers. While it is not legally binding, a letter of intent can provide an outline of important information such as medical history, family history, information about your child’s preferences and your wishes for the type of care they should receive.

Accountant: If you provide care to a child or dependent with special needs, you may qualify to take advantage of certain tax deductions for medical expenses, tax credits, and tax-advantaged accounts. For individuals disabled before the age of 26, a 529A account can provide tax-free growth and use of money to improve health and quality of life.

Financial Advisor: Some financial advisors specialize in working with families that have special needs children or dependents. A financial advisor can help coordinate the services of other professionals on the team while providing specific recommendations on how to fund and protect accounts for disabled dependents.

Utilize government benefits
The Social Security Administration provides two of the largest assistance programs to disabled individuals: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). The SSI program provides income for individuals with disabilities that have incomes which fall below certain levels and can be available to children who are blind or disabled as early as birth. The SSDI program provides a benefit for those who have work history but have been unable to work for a minimum of one year. Additional programs such as housing assistance, educational and vocational training, and nutrition assistance are also available.

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Non-grantor trusts to be regulated by IRS

The IRS and Treasury Department have joined forces to issue regulation regarding non-grantor trusts which have been used by wealthy people to avoid the property tax deduction cap in the new tax reform law.

In Notice 2018-61, the IRS and Treasury say they plan to release regulations to provide clarification on the effect of section 67(g) of the tax code on the deductibility of certain expenses described in section 67(b) and (e) that are incurred by estates and non-grantor trusts.

One way some wealthy peeople are getting around the new law is by setting up limited liability companies for their residences in high-tax states such as here in New York and then transferring interests in them to separate trusts set up in low-tax states like Alaska, where each trust can claim up to a $10,000 deduction for property taxes.

Four northeastern states have sued the govt over the new law as we wrote about here: 4 Northeastern states sue Trump administration .

 

 

 

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