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 at (212) 693-3737.

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 (212) 693-3737 for a free consultation.

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.

A health care proxy is a way to eliminate confusion among your loved ones and health care providers about your health care wishes should you no longer b able t make those decsions yourself. Hospitals, doctors, and other medical providers must follow the agent’s decisions as if they were your own.

Here are a some common questions and answers about health care proxies:

Who can be your health care agent?

Anyone 18 years of age or older, including a family member or close friend can be your health care proxy.

A doctor can act either as your proxy or your attending doctor, but not as both simultaneously. A number of special rules apply to patients or residents of a nursing home, hospital, or mental health facility who want to name a staff member as an agent.

What powers do health care proxies have?

Your proxy can decide how your wishes apply as your medical condition changes, but he or she is legally obligated to always act in your best interest.

The person you select as your health care agent will have as little or as much authority as you want. You may allow your agent to make all health care decisions or only certain ones.

A health care proxy is different from a living will because it does not require that you know in advance all the decisions that may arise. Nevertheless, you may give your agent instructions that he or she must follow and specify on the form the treatments you do or do not want.

Also, note that you can continue to make health care decisions for yourself as long as you’re able. You can also cancel the authority given to your agent by informing him or her or your health care provider orally or in writing.

To appoint a health care proxy, you and your agent must sign a New York health care proxy form in the presence of two adult witnesses. This is best done in an attorney’s office like the Law Offices of Jeffrey Weinstein. Mr Weinstein is an estate professional and can guide you through what you need to do to insure your wishes are carried out.

Here are some instances when you would need a proxy:

• You are in a coma from an accident or illness.
• You are terminally ill and not expected to recover.
• You have Alzheimer’s or another form of dementia.
• You are under general anesthesia, when something unexpected occurs.
• You are in a persistent vegetative state.
• You suffered from an illness that left you unable to communicate.

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?

Forty-seven percent said, “I just haven’t gotten around to it.” This is not surprising to experts, who say an aversion to end-of-life planning is not only rooted in fear but also procrastination.
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.

Your liability depends on the nature of your debt. Mortgages and other debt secured by property must be paid, while unsecured debt such as credit cards and student loans, are another matter entirely. Your liability depends very much on the nature of the bill, the type of property and your state’s laws. The following applies to New York State.

If an accounting of your debts exceed the value of your estate, probate may not be the way to go. If there’a not enough money in your estate to pay your creditors, a court will have to make a settlement which is an additional cost to the estate. There are instances where it might be advisable to proceed with probate, but you should obtain experienced counsel before proceeding. The Law Offices of Jeffrey Weinstein can help you navigate this process. Call us for a free consultation. (212) 693-3737.

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 (212) 693-3737 can help you navigate the process to lessen the hassle for you and your heirs.

If you follow in her footsteps could mean your loved ones won’t receive the inheritance you intended; disbursements could be long-delayed; ugly family squabbles may ensue; and your estate might owe additional taxes and your financial life will become a public record. If you have a special needs child, he or she may wind up losing some government benefits.

Many Americans don’t have a will or a living trust. A 2017 survey by Caring.com found that only 4 in 10 adults do. The study noted 64 percent of Gen Xers and 42 percent of boomers don’t have a will. The top reason for not taking these easy estate-planning steps, according to survey respondents: they “hadn’t gotten around to it.”

Chances are you don’t have anywhere near Franklin’s reported $80 million. But the actual dollar value isn’t the point. It’s about making sure your loved ones receive what you want the way you want them to.

If you don’t have a will, your estate will wind up in probate court, which means it will become public for anyone to see.

In Franklin’s case, the feds will take a big bite, too. There’s a 40 percent estate tax on an estate’s assets over $11.18 million (the exception to this: money or assets left to charity). If Franklin’s estate truly is worth $80 million, the Internal Revenue Service will snag $27.5 million of that.

Get a will for Pete’s sake. You can do it online but your better off having a real attorney to make sure it is totally legal. If you don’t have a will, your estate will wind up in probate court, which means it will become public for anyone to see and create hassles for your loved ones.

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.

So, no matter what your will says, the payouts from these products will go to the beneficiaries you designated when you filled out the forms, even if that was decades ago. That’s why it is important that you review beneficiaries regularly and choose contingent beneficiaries as backups, just in case. For example, you probably don’t want any of your estate to go to a former spouse so you need to make sure you update any documents that name them as a beneficiary.

For most people this should be enough, but for for those substantial assets it might be be best to set up a trust(s). By doing this you can exercise more control, minimize taxes and avoid potential challenges by heirs.

The best part of a trust is they don’t go through probate and are not public record, making the settling of an estate less complicated and less prone to legal challenges. Of course you will need to contact an attorney to decide what type of trust is best or you.

The Living Will

A living will is a document that sets forth what to do, and what not to do, if you are incapacitated and unable to make those decisions. This could be because you are in a coma, suffered a debilitating injury, or because you have become seriously mentally incapacitated. Here are some of the most basic considerations to account for in your living will:

• Life-Prolonging Medical Care: Your living will should state whether you want to receive life-prolonging treatments at the end of your life. Typical treatments include blood transfusions, respirators, dialysis, drug treatment and surgery.
• Do Not Resuscitate (DNR) Directives: In conjunction with directives about whether you want to receive life-prolonging medical care, most living wills will state whether or not you want to be resuscitated (CPR) at the end of your life. It is advisable to let your doctor and local hospital know about your DNR decisions and, if you do not want paramedics to try to resuscitate you, to wear a Medic Alert bracelet, anklet or necklace with those instructions.
• Life-Prolonging Food and Water: Often, if someone is comatose or seriously injured, they will only be able to survive through the external administration of food and water. When such treatment is stopped, the patient will die naturally of dehydration and medical professionals will typically apply medication to make such a passing comfortable. You should specify whether you want to receive food and water, under what conditions and timelines you would like to receive such treatment and when to stop it.
• Pain Management: Even if you decide you want to let death occur naturally, without intervening care, it does not mean you have to die with pain. Now commonly called comfort care or palliative care, the goal of such care is to emphasize qualify of life and dignity by keeping the patient comfortable and free of pain until they pass. Specify in your living will if you want doctors to emphasize pain management at the end of your life.

Need a Living Will or Durable Power of Attorney? An Estate Planning Attorney Can Help

Imagine suffering from a massive stroke, resulting in the inability to move your body or even speak, and thus unable to convey your wishes to doctors or other caretakers. That is what living wills and powers of attorney are meant to remedy. But it’s important to get ahead of the curve while you’re healthy and lucid. Learn more about your health care and end-of-life legal options by speaking with an estate planning attorney near you today.

Getting your estate plans in order doesn’t have to be complicated. Here are some common questions:

• If you wind up on life support, o you want to remain on it or have someone pull the plug?
• Who do you want to carry out your last wishes. Who will be your executor?
• How do you want your assets distributed?

Main documents

Power of Attorney for healthcare: Who will make decisions for yo if you can’t?

A living will; In some states this is called an advanced medical directive. This is for end-of-life decisions, like life support.

Beneficiaries

It is very common for people to forget to update their beneficiaries on various forms. This is most important if you’ve remarried. For example, chances are you don’t want to leave your 401(k) to your ex-spouse.

These are just a few of the things to remember when estate planning. Contact a credible estate professional who will be able to help you with the details and with anything we haven’t mentioned here.

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.

According to Bloomberg, the elite private banks say $25 million is just get you in the door, rich. To most $25 million is a non-attainablke dream but to the private bankers, it’s the basic tier.

But don’t get the idea that these bankers turn up their noses at those with just a puny few million. Bloomberg quotes Brent Beardsley of Northern trust Corp. who said 505 of their new clients have assets in excess of $10 million, “but to get to the highest level companies have raised the bar.”

What makes people rich these days has changed in the last 20 plus years. In 1994 what made someone rich was $3 million and now $25 million is high net worth.

Beneficiaries

So, ten tears ago you added your first born son as a beneficiary in your will. In that time he became a real deadbeat and you no longer want to include him. If you don’t change your will, he gets a piece of your estate if you don’t change your will. This may seem like a no-brainer, but it is a common error because quite often when it comes to wills, people sign it and forget it.

If you remarry this mistake can loom large and your ex-spouse can wind up with part of your estate if you don’t replace them with your current spouse.

The Unexpected

What happens if your spouse gets sick and your kid gets divorced? Is your kid hounded by creditors. These and other possible glitches can be solved by setting up trusts. In a trust you can control how, to whom and when money gets distributed, unlike an outright inheritance from a will.

Selling your house for a buck

This used to be common; selling your house to your kids for a dollar. But tax rules rules have changed over the last 50 years. If you sell your property to one of more of your children, they are on the hook tax-wise if they decide to sell it. If the propety is worth $600k an they sell it for $600k there is no tax liability. However, if they only paid a buck and they sell it for $600k they have to pay gains tax on $600k. Ouch.

What Exactly Is a Reverse Mortgage?

Reverse mortgages are available to homeowners who are 62 and older. To be eligible, you must live in your home as your primary residence.

Reverse mortgages work in a different way than traditional mortgages. With a traditional mortgage, you make payments to a lender. In a reverse mortgage the lender makes payments to you. The exact amount you receive will be based on the value of your home. Also a reverse mortgage allows you to keep your home.

Getting Paid

There are few ways to get paid with a reverse mortgage. You can opt for a lump sum payment, a credit line, a monthly payment, or a combo of the three.

Which you choose depends on your situation and how you want to use the money. Some just want it as a supplemental income. Some need it for a one time expense and others want to use the money as sort of a rainy day fund for emergencies.

A reverse mortgage is only viable if you have a big chunk of equity in your home. If you still have a small mortgage you will need to talk to a financial adviser to figure out your best options.

Fees!

Where the reverse mortgage sort of matches up with taritional mortgages is with fees. There are closing costs like in regular mortgages. Then there are loan originiation and appraisal fees. The lendr may charge loan servicing fees an mortgage insurance premiums.

Know What the Funds Will Be Used for

Have a plan. Before you embark on a reverse mortgage it is important to have figured out what you will use the funds for. If your in your early 60s you’ll have to make sure you don’t spend your money too frivolously to make sure you don’t run out later in retirement.

Check Out Other Options

If you’re short on dough, don’t have any family that wants to inherit your home, and you don’t want to leave it, then a reverse mortgage might be for you. If you have other assets or income other solutions might be a better fit. You can sell your home to your kids or refinance your mortgage.

Procrastination

Surveys have found that not only do 50% of people with children not have a will, many don’t have any other estate planning documents drawn up. This applies not just to young people but older retired Americans in all income categories.

People quite often don’t want to deal with estate matters because it means they have to think about their death. They also make the mistake of thinking their assets will automatically go to their surviving spouse or kids. That all depends on the state law. Different states have different laws.

Not signing your will

So you have drawn up a will. Good for you. But have you signed it? That might sound like a stupid question but It is not uncommon for people to draw up a detailed will, take it to their attorney and forget to sign it. Without your signature, it’s just a piece of paper.

Updating beneficiaries

You may think your assets will go to your spouse after you die, but another big mistake is not updating who you beneficiaries will be. If you remarried you might have forgot to update your will. The court system is littered with people battling it out over inheritances because the deceased forgot to update their will and their money went to their ex,

These are just three common mistake in estate planning. Consult a good estate attorney for more detailed information on what you need.

“Estate planning allows an individual to manage and direct where assets are to be distributed upon their death, but [it] also lets an individual plan in order to mitigate or reduce income and estate tax, protect families with young children, save money on court costs and attorneys’ fees associated with not having an estate plan, and plan for end of life,”

So what do we say? We say she is absolutely correct.

The main effect of estate planning give you peace of mind knowing that your assets have been taken care of and there will be no loose ends after you die.

Murphy is quoted again in the laduenews.com article saying,

“After someone dies, the worst thing in the world would be to be left scrambling in the dark, not knowing where [the deceased] loved one wanted to be buried or if [he or she] wanted to be cremated, if there is enough money for the funeral and what was supposed to happen to the contents of the house or the house itself. Having an estate plan allows you to set this all out for your family and friends so that when you pass away, your family can grieve for you and not have to worry about the logistics of death like bills, funeral and taxes.”

Since the idea of no leaving a federal tax burden to their heirs, many people are questioning the need for estate planning since one of the main reasons to estate plan is to lessen the tax burden. But there is more to estate planning than tax issues.

Kiplinger.com has a very useful piece by Tracy Craig. Craig is a Fellow at the American College of Trust and Estate Counsel. She has some useful info on estate planning beyond taxes.

To read more click on the links below:

State Estate and Inheritance Taxes Exist for Many

Probate Can be Costly

Many Beneficiaries Have Issues

Blended Families are Common and Can Be Complicated

To read the details see Sudden deaths like those of Kate Spade and Anthony Bourdain can devastate family finances

Here is what they recommend:

Get organized and find an expert

Address your mental as well as your financial health