Bashian P.C.White Plains Estate Planning Attorney | Business & Family Law2024-03-18T19:19:01Zhttps://www.bashian-law.com/feed/atom/WordPress/wp-content/uploads/sites/1401555/2020/12/cropped-Bashian_SITEICON_512x512_DEC20-32x32.jpgOn Behalf of Bashian P.C.https://www.bashian-law.com/?p=500062024-03-18T19:19:01Z2024-03-16T19:17:35ZA pet trust is a useful tool for those worried about what may become of a companion animal after their passing. The following scenarios often motivate individuals to create a trust specifically for the protection of a pet.
The acquisition of a long-lived animal
Dogs and cats live relatively short lives. Some cats may live 20 years or even longer, but many die in their teens. Dogs may live vastly different lifespans depending on their breed, but most live well under 20 years. Other pets may live for decades and might even outlive their owners. Horses, tortoises, snakes and parrots can easily outlive their human owners. Someone who takes in a pet knowing that the animal could easily outlive them may need to think about the animal's long-term care.
A concerning medical diagnosis
Some people begin estate planning because health issues force them to confront their own mortality. Cancer or progressive illnesses may lead people to prepare for the worst. The preparation process might include creating a trust to ensure the care and comfort of their companion animal should they succumb to their health challenges while their pet is still alive.
Concerns about loved ones' intentions
Perhaps someone knows that all of their children live pet-free lives. Maybe they worry that one child might agree to take care of the animal because of the resources provided for the pet in an estate plan. Once someone assumes control over the animal and the inheritance allocated for its care, they could surrender the pet to a shelter or arrange for its euthanization. When family members seem uninterested in caring for animals or when people worry about the misuse of resources intended for the support of a pet, a trust can be a way to ensure that whoever takes care of the animal puts its needs first.
Estate planning often forces people to think about emotional matters and practical concerns simultaneously. People who understand common estate planning pitfalls, like the mistake of leaving an inheritance to a pet, may have an easier time creating effective estate plans.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499762023-11-30T18:50:40Z2023-12-03T10:31:18ZGifting the house
Understandably, gifting a home to someone during life can sound like an enticing way to pass on this asset. However, while not an issue this year, exclusion amounts for lifetime gift tax exemptions will lower to about $5 million to $6.4 million by 2026 based on inflation estimates.
Accordingly, each dollar over your annual exclusion reduces your lifetime gift tax exemption, and may make gifting your home during life an unattractive option.
Gifting a home via a will or trust
Alternative to outright gift, you can protect and control its distribution to your loved ones after your passing through estate planning by making wills and establishing trusts.
Gifting a home via a will can ensure it goes to your intended recipient. However, wills are subject to probate, and the probate process can be time-consuming - meaning your beneficiary typically has to wait an undetermined period of time before becoming your home's new owner.
Conversely, a trust can be a quicker option. Instead of a home going to a beneficiary via a will, establishing a trust that controls the distribution of the asset can both speed the process, as well as allow greater control over the use an occupancy of the home pursuant to the terms of the trust itself. Additionally, and unlike a will, using a trust to pass a home means the transfer won't be on public record, and can also minimize capital gains taxes.
Selling the home
Instead of gifting your home, selling it to someone you choose can benefit you and this property's future owner as well. This option enables you to remove your home from your taxable estate, and avoids the probate and/or trust process all together.
While it might not be a pressing issue now, having your estate and assets in order is crucial before it's too late.
Resolving what to do with your property now helps save you and your beneficiaries future stress and confusion.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499682023-09-29T13:31:26Z2023-10-30T09:13:02ZEach child's financial needs
One of the primary reasons parents give unequal inheritances is to help a child or children who are struggling financially. Some parents feel they would rather give their assets to a child who needs more help than one with plenty of financial resources. Alternatively, parents may leave less money to a child they have supported financially during life.
Similarly, if you have a child with special needs, you may want to place a significant portion of your assets into a trust to pay out funds for the remainder of their life so that they are properly cared for - despite the fact that this will leave less for your other children.
Alternatively, sometimes a child has compromised their lifestyle to care for a parent, such as working only part-time or giving up their job. In this situation, you may want to compensate the caregiver child for this sacrifice by increasing their share of an inheritance.
Managing expectations
In some situations, an unequal inheritance can trigger many conflicting emotions between siblings, with some siblings feeling that parental favoritism has survived beyond the grave. Discussing your intentions with your children so that they have realistic expectations about what inheritance they will receive can be an effective way to avoid litigation after you have passed.
To that end, by explaining your estate plan to your children while you're still alive, and sharing the honest reasons behind your decisions, can help ease this process. If necessary, include professionals who can help your children understand any tax implications and liabilities that might come with their inheritance, as well as other details of your estate plan.
Consider putting your explanation in a handwritten letter if an in-person conversation is difficult. This step can even be used - in some circumstances - to defend your will in court if one sibling contests it on grounds of "undue influence" by another sibling.
For many, estate planning means treating their children fairly. However, fair does not always mean equal, and an unequal inheritance structure might make more sense for your family.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499652023-09-28T14:12:34Z2023-10-03T10:11:34ZUnclear instruction
Your wishes must be made clear in your will and estate plan. Confusing language left to interpretation can cause family members and beneficiaries to commence litigation to settle questions regarding the interpretation and implementation of your estate plan. Needless to say, there is no substitute for precise directives as drafted by a knowledgeable attorney who is familiar with your unique set of estate planning needs.
Change the estate plan as your life changes
When your estate plan is originally created, it should reflect the needs of your family at that moment. As time passes, your family structure and dynamic will almost certainly change. You may have, children, grandchildren or acquire greater assets and/or a business. If you don't change your estate plan to reflect the changes in your life, important aspects of the plan could be rendered ineffective, and your testamentary intentions will not be realized. Worse still, your beneficiaries might disagree as to how to treat your estate, and litigation could ensue.
Not naming contingent beneficiaries
Beneficiaries should be named to receive or manage any asset in an estate plan during the estate planning process, and contingent beneficiaries should be named in case something happens to the primary beneficiary. Skipping this critical step can create confusion, an ineffective estate plan, and inevitably litigation.
Estate plans are as dynamic as the person who creates them. They are important for anyone who wants to preserve their financial legacy, and by extension their family's financial well-being after they are gone. Failing to make a proper estate plan, or failing to update your estate plan over time, can have very real, detrimental, but wholly avoidable consequences for the people you love.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499602023-07-31T15:33:27Z2023-08-07T09:25:50ZUsing a trust can help preserve wealth and protect beneficiaries
You can use several forms of trust planning when preparing an estate plan.
Creating a charitable trust allows you to distribute assets to a chosen charity.
Another Trust option when estate planning is a revocable trust. It can protect beneficiaries by managing and controlling investments when they lack experience.
Utilizing these types of trusts when transferring high-value assets to your heirs can not only be more efficient than the probate process, but can potentially reduce taxes and shelter your assets from estate and transfer taxes after you die.
Gifting your assets and avoiding high taxes
In 2023, you can gift $17,000 worth of assets and avoid the federal gift tax. However, for gifts worth more than $17,000, the excess amount will count against your lifetime gift and estate tax exemption, which is $12.92 million for 2023. Exceeding that amount subjects your gifted amount to a tax rate as high as 40%. If you have a large estate to pass on to beneficiaries, consider creating a revocable trust, allowing you to retain control of all the assets in the trust.
Avoiding the probate process
Creating an estate plan featuring trusts is also an excellent way to avoid probate, which can be a long and tedious process.
Indeed, using trusts of many types can effectively bypasses the probate process.
As revocable trusts become irrevocable when you pass away or become incapacitated, they can help your heirs avoid ongoing administrative expenses.
Knowing your options when estate planning can help ensure your wishes are met when passing assets on to heirs.
Utilizing trusts can be one of the best ways to avoid taxes and ensure your beneficiaries are protected.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499562023-06-30T14:14:47Z2023-07-06T10:06:16ZMarriage or remarriage
Marriage is a good reason to update your estate planning documents.
Naming your new spouse as an estate beneficiary ensures they will receive what you wish to leave them.
You can also update beneficiary designations on your insurance policies and financial accounts, as well as name your spouse as your agent under a power of attorney and healthcare proxy.
If you've remarried, your new spouse should replace your former spouse on all documents.
Divorce
Like marriage, divorce is a good reason to revisit your estate plan and make changes.
You will want to remove your former spouse’s name from all your documents and replace them with someone else.
Children
If you have a new child, you can revise your estate planning documents to protect them.
Update your will by naming a trusted person to serve as their guardian in case you pass away while your child is still a minor.
You can also create a trust for a child's benefit that can be managed by a trustee until your child reaches a certain age, and are mature enough to receive any assets left within.
Health concerns
If you are ill or were recently diagnosed with a serious health condition, you may want to revise your estate planning documents.
If you don’t have a healthcare proxy (similar to a power of attorney), it’s wise to create one and choose someone reliable as your agent to ensure that your healthcare wishes are carried out if you become incapacitated.
You may also want a living will or do not resuscitate order based on what care, if any, you want in life threatening situations.
Estate planning is an important part of securing your family’s future. You can take charge and ensure that things are handled as you wish.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499302023-05-23T15:57:24Z2023-06-05T09:53:10ZRevocable and Irrevocable trusts
When trusts are created to avoid the probate process, they can be either revocable or irrevocable. Revocable trusts are popular because they are easy to modify, but they have some disadvantages. The assets placed into a revocable trust are owned by the trust, but they are still controlled by the grantor because the provisions of the trust can be changed at any time. This means that assets placed into revocable trusts are not protected from creditors and do not reduce estate taxes.
Conversely, Irrevocable trusts can shield assets from creditors and reduce estate tax liabilities, but they cannot be changed.
Pour-over Wills
Assets placed into trusts can be distributed without first going through the probate process. This is why combining trusts with pour-over wills is a common estate planning strategy. Drafting a pour-over will ensures that all of a decedent’s assets are placed in a revocable or irrevocable trust when they die. A pour-over will must be probated just like a regular will, but the process is usually completed fairly quickly because the trust is the only beneficiary.
Avoiding estate planning mistakes
Creating a revocable or irrevocable trust can help avoid the probate process because the assets placed into a trust are no longer owned by the grantor's estate, and drafting a pour-over will ensures that any remaining assets are transferred into trust after the grantor passes away.
However, trusts and pour over wills must be drafted carefully as simple mistakes can strip them of their benefits.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=499092023-03-29T18:51:39Z2023-05-02T10:38:38ZTrustworthiness
Above all other essential traits, choose a trustworthy individual to serve as your attorney-in-fact when you plan your estate.
Your chosen individual should be honest and reliable. They must be able to enforce your choices even if they go against the person's personal beliefs or preferences.
Take care when selecting a family member, especially if your choice could cause a conflict.
Discuss your needs with family members and try to defuse conflicts before deciding.
Competence
Your attorney-in-fact should have expertise and familiarity with the information needed to make educated decisions.
They should know, or seek to find out, the relevant laws and regulations that pertain to any decisions they need to make on your behalf.
Communication and compatibility
When you select your attorney-in-fact, speak with them first to ensure they are willing to take on the job.
Choose someone you can communicate with easily, who can communicate your wishes clearly and accurately to other parties when making decisions.
In many cases, your spouse is the best choice.
If you set up a trust during your estate planning, the trustee is a good choice.
In all events, your attorney-in-fact must be someone you relate to and feel comfortable with, as you must share personal and confidential information with them.
Availability and willingness
Choose an attorney-in-fact who is nearby geographically, as they may need to be available on short notice. The individual may also need to remain flexible to adapt to evolving situations. The position comes with specific responsibilities, and your chosen attorney-in-fact must be willing to devote their time and attention to acting on your behalf when needed.
Selecting the best attorney-in-fact is essential, and you can make a more informed choice when you know which qualities truly matter.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=496202023-03-27T18:46:47Z2023-04-17T10:22:59ZStudent loan debt
Debts like student loans are only divided in a divorce if they were taken on during the marriage. Obligations incurred before spouses walk down the aisle is considered separate property. If a divorcing couple in New York took out student loans while they were married, the debt will be divided based on factors including:
The length of the marriage
The incomes of both spouses
The obligations of both spouses
Which souse benefitted from the loans
Consolidated federal loans
Prior to 2006, couples with student loans were able to combine and consolidate their debt to lower their interest rates and reduce their payments. When Congress eliminated the program, lawmakers failed to provide a way for divorcing couples to sever their consolidated student loans. That issue was addressed in October 2022 when President Joe Biden signed the Joint Consolidation Loan Separation Act into law. Consolidated federal student loans can now be divided in a divorce, but the process is complicated. Both spouses must consent to the separation, and approval from the Department of Education is required.
Divorce settlements and prenuptial agreements
In New York, debts like student loans are divided equitably but not necessarily equally in a divorce. Couples who would prefer to decide these matters for themselves instead of leaving them up to a judge can reach an agreement at the negotiating table. They could also act proactively by drafting either prenuptial or postnuptial agreements that contain provisions dealing with marital assets and debts. If cosigned loans are divided, they should be refinanced as quickly as possible because lenders are not bound by the terms of divorce settlements.]]>On Behalf of Bashian P.C.https://www.bashian-law.com/?p=477572023-03-27T18:20:50Z2023-04-03T10:19:58ZIs private school necessary?
Private school is a luxury, and you may object to paying for your children's tuition. You may hope to pull your children out of private school, but your spouse might object to enrolling them in a public school. If you refuse to pay for tuition on these grounds, your spouse can take you to court to reach an agreement. There, your spouse must argue that private education benefits your children. And they must make the case that public school would harm them.
Is child support a factor?
If you pay your spouse child support every month, you might think it could go toward private school tuition. Yet this depends upon your existing decree. Whether you and your spouse agree upon private school or if a hearing mandates it, the court will help you determine a payment plan. If you must increase your monthly child support payment to factor in tuition, you won't have to cover the bill alone. Your spouse will foot part in most cases, unless your support is their entire income.
Private education costs cause severe headaches. But you can reduce their burden by considering whether they're necessary – and splitting the expense with your spouse if they are. Working with a family law professional can help you reach a fair plan if your spouse pressures you to pay the entire bill.]]>