Archive for the ‘4) Trusts & Estates’ category


October 19, 2014

Now that your child has reached the age of 18, and may be starting college, there is something very important that you as parents should do, and that is to ask your son/daughter to sign a Power of Attorney and a Healthcare Proxy.


Because in most states parents do NOT have the authority to make health care decisions, or manage money on behalf of their kids once they turn 18. It does not matter that you are paying their tuition, or that they are covered on your health insurance or that you claim them as dependents on your tax returns. You still have no authority to make health or financial decisions for them. This means, if your child is in an accident and becomes incapacitated, even temporarily, you might need court approval to act on his or her behalf or even to find out basic information as to his or her medical condition.

There was a case in Texas where parents were unable to secure even basic information about the medical condition of their college-aged sons following a car accident that left both boys unconscious and in the hospital. After a few days, both sons regained consciousness and gave their doctors permission to speak with their parents. In another case – a couple’s college-aged daughter remained in a coma for weeks- parents had to start a court proceeding to become their daughter’s temporary legal guardian. Such court proceedings typically cost thousands of dollars, take time, and are not as uncommon as you might think.

Our firm offers our clients and friends of the firm what we refer to as a FREE COLLEGE STUDENT PACKAGE.   We offer any college age young adult the benefit of having  our firm prepare the following two documents for them:

     Health Care Proxy  – The Health Care Proxy will allow your child to name another person (typicallyhis or herparents) to make medical decisions for them if they are unable to make or communicate such decisions on their own. This document will also allow thedesignated agent to access your child’s medical information.

     Power of Attorney – The Power of Attorney allows your child to name you (or another person) to take over financial matters if need be, such as handling bank accounts, signing tax returns, and making other non-medical decisions.
If you are interested in taking advantage of our offer, please contact our office.

Do You Know Your Responsibilities If You Are Appointed as an Executor Under A Will?

July 14, 2014

Being appointed as an executor under a will is both an honor and an obligation. In order to make the administration of an estate go smoothly, an executor will often turn to an attorney for aswill--621x414sistance to avoid costly errors. So, as the nominated executor, your first step should be to select any attorney to represent the estate with whom you are comfortable working with. You are not required to retain the attorney who drafted the original will, nor the attorney who has possession of the original will, to assist you in your role as executor.

Below is a brief list of some of the duties of an executor, which will give you a general understanding of the role and responsibilities you assume if you accept the appointment.

1.  Understand the Will.

 It is very important to read and understand the will so that you know who the beneficiaries are and what assets they should receive.  You will need to know if the will gives all the assets outright to the beneficiaries, or if it creates trusts to which the assets are to be distributed.

2.  File the Petition for Probate with the New York State Surrogate’s Court.

A will must be admitted to probate before the distribution of a decedent’s assets. To submit a will for probate you must: (a) locate the New York State Surrogate’s Court with jurisdiction over the estate, which is the court in the county where the decedent lived; (b) obtain and complete a Petition for Probate and all other documents required to file the petition; and (c) file the Petition for Probate, along with the original will and death certificate. If you work with an attorney, they will handle this obligation.

3.  File an Inventory of the Estate’s Assets with the Surrogate’s Court.

After your appointment, you are required to prepare an inventory listing all of the estate’s personal and real property and file it with the Surrogate’s Court. Each asset must be appraised and fully described.

4.  Notify Banks, Credit Card Companies and Government Agencies of the Decedent’s Death.

You should notify all financial institutions in which the decedent held an account, and all credit card companies of the decedent’s death. The Social Security Administration must also be notified.

5.  Set Up a Bank Account for the Estate.

You must set up a separate bank account for the estate. Estate funds must be kept separately and not comingled with any other funds. If the decedent is owed any money, such as a paycheck, this can be deposited into the estate account. It is imperative to keep exact and careful records of all money received and paid out.

6.  Manage the Estate Assets.

You may have to work with attorneys and financial advisors in order to make sure the estate’s assets are properly valued and invested pending distribution to the beneficiaries.

7.  Pay the Estate’s Debts and Taxes.

You must have income tax returns for the estate timely prepared and filed, along with any required payment. You are also required to pay from the estate assets any debts of the decedent which arose prior to death and any debts of the estate incurred in connection with administering the estate.

8.  Represent the Estate in Court.

You will have to appear in court on behalf of the estate in the event the decedent was involved in any lawsuits at the time of death.

9.  Distribute the Assets of the Estate.  

After court approval,you are responsible for distributing the assets of the estate to the beneficiaries in accordance with the decedent’s wishes as expressed in the Will.

10.  Close the Estate.

You must file certain forms with the Surrogate’s Court to close the estate, and should obtain releases from all beneficiaries.

The job as an executor may be easy or complex depending on the simplicity or complexity of the estate, and the responsibilities may go beyond what is listed above. An executor is held to a higher standard of behavior, is expected to act in an ethical manner and manage the estate carefully. If the executor breaches this fiduciary duty, the executor could be held personally liable for any losses suffered by the estate or beneficiaries. We are happy to assist you with your responsibilities as executor, or with any other estate administration needs.


April 14, 2014

The New York State budget passed on April 1, 2014 includes dramatic changes to the state estate and gift tax laws. Below is a brief summary of the most important changes affecting New York trusts and estates.  It would be prudent to contact your attorney to discuss how these changes affect your estate plan and whether any action is necessary or desirable.

Increase in Estate Tax Exemption
Since 2001, the federal estate tax exemption amount (the amount of assets that can be passed to heirs without incurring any estate tax), has risen from $1,000,000 to $5,340,000 while New York State’s exemption remained at $1,000,000 per person. Governor Cuomo’s 2014-15 budget bill has raised the New York State estate tax exemption amount to $2,062,500 per person immediately, with increases over the next 5 years so that the state estate tax exemption amount will mirror the federal exemption.

The exemption amounts phase in according to the following:

Individual Dying On Or After:                                Tax Exemption Amount:

  • April 1, 2014 & before April 1, 2015                         $2,062,500
  • April 1, 2015 & before April 1, 2016                         $3,125,000
  • April 1, 2016 & before April 1, 2017                         $4,187,500
  • April 1, 2017 & before January 1, 2019                    $5,250,000
  • January 1, 2019 & thereafter                                    $5,000,000+*

       * Indexed for inflation from 2010

Inclusion of Lifetime Gifts in New York Estate Tax Calculation
Although New York does not impose a gift tax on lifetime transfers (unlike the federal government), the value of gifts made by a New York decedent (i) within three years of death and (ii) between April 1, 2014 and January 1, 2019 will be added to the value of the decedent’s estate and may result in an estate tax on such gifts.

Repeal of New York’s Generation-Skipping Transfer Tax.
The New York (but not federal) generation-skipping transfer tax has been repealed, meaning that New York will not impose a generation-skipping transfer tax on certain trusts that are held solely for the benefit of individuals two or more generations below the creator of the trust.

Tax laws are highly technical. Always consult with your attorney or tax professional before engaging in any planning.

Naming Life Insurance Beneficiaries: 8 Ways to Screw Up

February 10, 2014

Naming who should get your life insurance money after you die sounds simple, but designating beneficiaries can get tricky.  Mistakes are common, and when made, they can be heartbreaking and expensive.

When mistakes are made you’re not creating problems for you, you’re creating problems for the people you leave behind.

1. Naming a Minor Child:  Life insurance companies won’t pay the proceeds directly to minors. If you haven’t created a trust or made any legal arrangements for someone to manage the money, a court proceeding to appoint a guardian will be necessary.  This is a costly process.

Instead, you can set up a trust to benefit the child or name an adult custodian for the life insurance proceeds under the Uniform Transfers to Minor Act.

2. Making a Dependent Ineligible for Government Benefits:  Naming a lifelong dependent, such as a child with special needs, as beneficiary puts the loved one at risk for losing eligibility for government assistance. Anyone who receives a gift or inheritance of more than $2,000 is disqualified for Supplemental Security Income and Medicaid, under federal law.

Work with an attorney to set up a special needs trust to receive the proceeds of a life insurance policy.

3. Falling Into a Tax Trap:  Life insurance death benefits are generally tax-free — except when three different people play the roles of policy owner, the insured and the beneficiary. In that case, the death benefit could count as a taxable gift to the beneficiary.

Say, for instance, a wife owns a life insurance policy on her husband’s life and names their adult daughter as beneficiary. The wife effectively is creating a gift of the policy proceeds to her daughter. The person who makes the gift — the wife — is the one who would be subject to a gift tax if the amount of the gift exceeds federal limits.  The problem could be avoided in most cases by having the husband own the policy, insuring himself.

4. Assuming your Will Trumps the Policy:  A life insurance policy is a contract. Regardless of what your Will says, the life insurance money will be paid to the beneficiary listed on the policy. That’s why it’s important to contact your insurer to change your beneficiary if needed.

5. Forgetting to Update:  The designation of beneficiaries of life insurance policies is not a ‘set it and forget it” event.  You should review your policy every three years and after major life events, such as marriage, having children or divorce. Change the beneficiaries when circumstances change.  Unfortunately, many people forget to do so.  It’s not uncommon to find an ex-spouse still listed as beneficiary on the life insurance policy when reviewing a client’s insurance.

6. Staying Silent:  The most important thing is to tell someone so they know you have a life insurance policy, where it is and how to find it.  Open communication with beneficiaries now can save a family from chaos later – or even worse, never claiming the benefit.

7. Giving Money with No Strings Attached:  Naming your young-adult children as beneficiaries without setting any conditions for how the money is dispersed can be a setup for financial failure. How many 18- or 21-year-olds can handle a huge influx of cash? One way is to set up a trust with specifics for who will manage the money, how the money can be released and what it can be used for until the young adult reaches a certain age.

8. Not Naming a Contingent Beneficiary:  Most people just think they’re going to make their spouse beneficiary, but don’t take into account that the spouse might predecease them.  It’s conceivable that something could happen to you and your spouse together.

Sometimes people fail to name any beneficiaries. When there is no living beneficiary, the life insurance benefit typically goes into the estate and is subject to probate. That leads to two complications. One, heirs might face a long wait to get the money. Two, the life insurance proceeds, which normally would be protected from creditors, now can be used to pay off creditors of the decedent.

It is recommended that you name secondary and final beneficiaries. If the primary beneficiary dies before you do, then the money passes to the secondary beneficiary. If the secondary beneficiary has passed away when you die, then the death benefit goes to the final beneficiary.

If you have any questions about your designation of life insurance beneficiaries, or need assistance with any other aspect of your life insurance policies, call our office to schedule a phone consultation.

Ten Most Common Estate Planning Mistakes

July 21, 2013

Estate planning seems so simple. It can be deceptive, though. Here are ten mistakes people commonly make that can cause chaos for your family later. These are not in any particular order of importance.


Mistake #1: Believing Your Estate Is Too Small. Estate planning does not depend on how much you have. It is about how you handle what you do have. Your net worth may influence the type of estate plan that is appropriate for you, but even a smaller estate warrants some type of planning.

Mistake #2: Believing That You Are Too Young. A lot of people think they are not old enough to need an estate plan. It is surprising to see how many obituaries there are for people in their 30’s, 40’s or 50’s. Anyone over the age of 18 should seriously consider having an estate plan in place. This is especially important for families with young children, because the lack of an estate plan can cause young children to end up with half of the assets of a parent that passes away prematurely.

Mistake #3: Not Planning Properly to Prevent Assets from Going to Unintended Beneficiaries.    An estate plan can preserve your children’s inheritance if they divorce.  Up to 50% of your assets could end up with an ex-son or daughter in law without proper planning.  Proper estate planning can also prevent your assets from going to strangers, instead of your children, should your spouse get remarried after your death.

Mistake #4: Failing to Plan for Incompetence.  Every estate plan should address what happens if you become incompetent and unable to manage your financial affairs or make medical decisions.  The common perception is that estate planning is only death planning.  Guardianship proceedings for a mentally incompetent adult can be lengthy and expensive.  Implementation of commonly used estate planning documents can avoid those problems.

Mistake #5: Incorrectly Titling Assets. It is absolutely essential to coordinate the way you title your assets with the type of estate plan you have. This is one of the most overlooked aspects of estate planning. For example, just because you set up a trust does not mean you will automatically avoid probate unless all of your assets are titled correctly to work through your trust. Also, people often misuse “probate substitutes,” such as joint and survivorship, payable on death, beneficiary designations and similar titling methods. Sometimes these are good, but if used incorrectly, they can completely ruin an estate plan.

Mistake #6: Failing to Properly Own Life Insurance.  While the proceeds of a life insurance policy are generally income-tax free, insurance proceeds left to a surviving spouse or children may eventually be subject to estate tax without proper planning.

Mistake #7: Wasting Basic Estate Tax Planning. Estate planning is not all about taxes, but tax planning is often an important aspect. This year, in most cases, the first $5.25 million of each person’s estate is exempt from federal estate taxes, so many people do not have to worry about that. But did you know that any assets over $1 million in value may be subject to New York estate tax? Good estate planning can minimize the impact of Federal and New York estate taxes.

Mistake #8: Ignoring Income Tax Consequences. Income taxes are often an important consideration in estate planning. Individual retirement accounts, 401k’s and other retirement plans are often subject to both estate and income taxes on your death. The tax hit can be huge without proper planning.

Mistake #9: Do it Yourself Planning. Estate planning is more than just creating documents. It involves understanding the whole picture of your finances and personal goals, and then determining the best tools to be used to accomplish your objectives. Most people cannot properly plan their estate on their own using software or internet forms.

Mistake #10: No Estate Plan at All.  Perhaps the worst mistake you can make is not having any estate plan at all. If you do not have an estate plan, New York law has one for you. The problem is that it may not work the way you would have wanted.

There is an abundance of misinformation and misunderstanding about estate planning. The mistakes listed above are just a sampling of poor planning. You owe it to yourself – and more importantly to your family – to avoid mistakes and to put a good estate plan in place. You can do this by working with experienced professionals, like our firm, who focuses on estate planning. Otherwise, the legacy you leave after you are gone may be one of chaos for your family to clean up.

I’M NOT RICH – Do I Still Need to Do Estate Planning

November 10, 2011

The simple answer for most people is typically “YES”, although the reasons may differ.  Below is a list (in no particular order) of reasons to do, or review your estate planning.


15 Most Common Reasons to Do (or Review) Your Estate Planning

  1. The desire to designate who will manage your affairs if you become disabled and when you pass away.
  2. The desire to plan for Medicaid and its impact on your estate if you must go into a nursing home.
  3. The desire to avoid probate when you pass away.
  4. The desire to protect children from a prior marriage if you pass away before your new spouse.
  5. The desire to protect assets to be inherited by your heirs from lawsuits, divorces and other claims of their creditors.
  6. The desire to implement safeguards to protect children (and/or grandchildren) who may not be capable or experienced in managing money to be inherited.
  7. The desire to provide money to special needs children and grandchildren.
  8. The desire to do estate Tax Planning – While the Federal exemption is $5 million, NYS only allows for a $1 million exemption.
  9. The desire to protect a portion of your estate for your children and grandchildren if you pass away first and your surviving spouse remarries.
  10. The desire to address different needs of different children.
  11. The desire to prevent or discourage challenges to your estate plan and/or will.
  12. The desire to designate a guardian for minor children.
  13. The desire to assure sufficient funds for an education for children/grandchildren, despite what they (or their parents) dream of doing with the inheritance.
  14. To address “Brady-Bunch” family estate planning issues: assure the step-parent doesn’t spend your children’s inheritance and/or provide for a spouse without sacrificing the intended legacy for children of a prior marriage.
  15. The desire to avoid Court involvement in the process of implementing your estate plan, to avoid expense, delay and/or public disclosure.

Whether you have a traditional family or a complex situation, we can assist you in designing an estate plan appropriate for you and your family.

Please contact us if you have any questions or would like to schedule an appointment to discuss your estate planning needs or to review an existing plan to determine if it is still appropriate or if any changes are required.

Addressing Personal and Business Issues as You Start the New Year

January 21, 2010

As we now start the new year, and begin a new decade, it is a good time to do a bit of self examination and determine what (often ignored) personal and business legal issues may need to be addressed, and make a resolution to address those issues in 2010.

Personal Legal Matters.

On a personal level, one issue about which people routinely procrastinate, both young and old, is estate planning. No matter your stage in life, nor your net worth (estate planning is needed by both the wealthy and the not so wealthy) proper estate planning, which addresses both lifetime and death issues, is very important to do. For the young, the most important aspect often relates to the appointment of a guardian for minor children within a Last Will and Testament. For older couples, designating an agent to make healthcare decisions (within a Health Care Proxy), and executing a Power of Attorney can be crucial in the event of a unexpected disability.

Even if you have done some estate planning, when was the last time you reviewed your estate planning documents to determine whether they still meet your needs? The beginning of the year is a good time to review what you’ve implemented and determine whether any of it requires any changes. As you may have heard, there is significant uncertainty right now regarding estate taxes, which may justify changes in tax formulas contained in wills and trusts. Very often a change in family relationships (i.e. births, deaths, divorce, etc.) also requires changes to an estate plan.

Business Legal Matters.

If you own your own business, January is a good time to take care of some legal housekeeping for your company.

Very often new laws which may affect the operation of your business go in effect at the beginning of the year. You should make yourself aware of whether there are any new laws which may impact your business.

Each year, you should be reviewing the contracts and processes that affect the vital areas of your business to assess where changes need to be made or action taken. Not sure where to start? Here are a few items you should address at least once a year.

1.  Employee Manuals/Handbooks. Update Employee Manuals/Handbooks to revise any policies which require change based on changes in law or business operations, or to include new policies which may not have been previously included. More importantly, if your company does not have one, consideration should be given to having one prepared.

2.  Corporate Meeting/Resolutions. One of the corporate formalities which must be followed in order to insure the personal liability protection afforded by the use of corporations (and limited liability companies) is the adoption of annual corporate resolutions or the holding of annual meetings of the shareholders and directors.

3.  Shareholders’ Agreement. Shareholders’ agreements requiring annual revaluations should be updated. In the event of an increase in value, consideration should be given to increasing any life insurance on the lives of the shareholders intended to fund a buyout in the event of the death of a shareholder.

4.  Lease Agreements. If you have lease agreements for property and equipment, review them to make sure the obligations of your company are being properly performed.

5.  Business Filings. Make sure all business licenses are up to date, and required filings are made with local governmental agencies.

Feel free to contact our office if you have any questions or need any assistance in accomplishing your personal and/or business New Years resolutions.


October 6, 2009

The State of New York is currently holding billions of dollars of unclaimed funds for individuals, trusts, estates and businesses. Some of this money may belong to you!  In fact, I have recovered over $7,500 from NYS belonging to myself and other family members.  I have also assisted several clients in finding funds belonging to them, which resulted in thousands of dollars being recovered.

According to recent statistics, there is over $9 billion dollars in unclaimed funds that are being held by New York State. From April 2007 to March 2008, over $194 million dollars was paid out to more than 260,000 different people. The amounts varied, but over 59% of the claims were for over $100.  Odds are, someone you know has some money they have forgotten about and which are being held by New York State. In fact, one individual has a $1.7 million unclaimed check waiting for him at the New York State Comptroller’s Office.  That person could be you.

Why does New York State have unclaimed funds?
Banks, insurance companies, utilities, investment companies and many other businesses are required by State law to turn over inactive accounts to the State. The Office of the State Comptroller then serves as the custodian of this money until it is claimed.

What are some types of unclaimed funds?
Unclaimed funds are money or the rights to money that have been dormant or forgotten. Some common examples include: savings accounts, checking accounts, uncashed checks, telephone/utility deposits, rental security deposits, wages, insurance benefits/policies, mortgage escrow refunds, stocks and dividends, mutual funds, certificates of deposit, trust funds, and estate proceed.

How can you search to see if you or anyone you know is entitled to unclaimed funds?
To see if there are unclaimed funds belonging to you or anyone else you may know, you can visit the New York State Comptroller’s website and conduct a search at  You can also call the New York State Comptroller’s office at 800-221-9311.  There is no charge to search or file a claim to recover unclaimed funds.

What do you do if you find that there is property being held that belongs to you?
The right to make a claim never expires and the process itself only takes a few minutes..  If you find that there is something in your name, complete the printable application online, send it in, and a check will be sent to you by mail.  There is no fee to reclaim the money. Some private companies search the records on your behalf and charge a fee of 15% of any money they recover, but their access to the funds is no different than yours.

So I urge everyone to at least search your own name on the New York State Comptroller’s website to see if they are holding any money of yours, and just for my own curiosity, if you happen to find anything, please send me an email letting me know (or leave a comment below).


August 17, 2009

A new law concerning New York powers of attorney becomes effective September 1, 2009. There are several major changes affecting the content and the execution of the power of attorney form:

1. AGENTS’ SIGNATURES: The form must be signed, dated and notarized, not only by the person making the appointment, but also by the agent being appointed.

2. GIFT RIDER:    To authorize the agent to make gifts, gift-giving authority must be initialed by the principal (person who signs a power of attorney) and accompanied by what is called a Statutory Major Gifts Rider (SMGR), which must be acknowledged and witnessed by two witnesses in the same manner as the execution of a will. Only small gifts of not more than $500 each per calendar year to individuals and charities, which continue a custom of the principal, can be made by the agent without a SMGR.