Estate Administration

Published on: September 3, 2011

Considering A Lifetime Gift? This is Your Year, says New York Probate Lawyer

by Stephen Bilkis

According to one NY Probate Lawyer, this is the year to give. Thanks to sweeping changes in the laws governing the estate tax by President Obama late in 2010, making a lifetime gift is now easier than ever.

Lifetime gifts have long been the preferred method for transferring wealth from one family member to another. Lifetime gifts are not subjected to the heavy tax burden which posthumous gifts typically carry. The catch, in the past, was that lifetime gifts were capped at a relatively low level before the Gift Tax kicked in, meaning that the amount that could be transferred to a spouse or other loved one was actually quite small. The new law raises that cap to an all-time high.

If you are an Asset Planner or New York Estate Planning Lawyer, this new loophole could mean big business in the next two years. The new law is set to expire in 2012, and no additional plans have been made in Congress, meaning that the amount of time taxpayers have to take advantage of the new law could be short. Planners in New York City and Long Island are aware of these changes.

Published on: August 25, 2011

Loss of Estate Tax translates to loss of major revenue for a local Ohio town, reports New York Estate Planning Lawyers.

by Stephen Bilkis

A local Ohio town worries about the effects eliminating the estate tax will have on its overall revenue and future plans.

The town’s financial director says here city receives a large chunk of revenue from estate taxes currently. For example an Estate that’s valued at over $500,000 is taxed at 7 percent. The town gets 80 percent of this revenue and the rest goes to the state of Ohio she added.

This high percentage translates to roughly $5 million per year for the city, said aNew York Estate Planning Lawyer. He went on to say that the city budgets for this currently and without the extra revenue will likely have to find other ways to make cuts. Estate Administration in Manhattan and Queens must take these taxes into account for their clients.

Published on: August 21, 2011

Tax Law Expires Leaving Elderly at Risk

by Stephen Bilkis

Many senior citizens got an unpleasant surprise this February. Pensioners and seniors who rely on federal benefits to make ends meet were hit with the harsh new reality of the federal financial landscape when they discovered that their social security checks had been decreased. Although some were warned about the change in a letter that came with their check, many were left guessing.

We spoke with a New York City Estate Planning Lawyer, who explained the recent change in benefits. The reduction in the payout for senior citizens was an indirect result of the new tax relief act, which was enacted in tax year 2010. The new tax relief act cuts social security taxes for those still in the workforce, which federal economists hoped would help stimulate the economy by giving those who are still contributing to the marketplace more expendable income.

In order to make room for the new cuts, which according to the New York Estate Planning Lawyer amount to approximately a two percent drop in collected income by the IRS, the federal income taxes for those who are not working were raised, effectively lowering the payout for retirees and others who depend on social security benefits. Lawyers in Nassau and Suffolk Counties must be aware of these and any other changes that come down and effect Estate Administration.

Published on: August 13, 2011

New Estate Tax Law Alters Estate Decisions

by Stephen Bilkis

Extensive trust-planning and maneuvering tax law in order to protect a surviving spouse has long been a central part of the job of any qualified New York City Estate Planning Lawyer. Almost as soon as the United States Government christened the estate tax, wealthy families began finding ways around paying. Of central concern for many married couples is how to avoid the estate tax long enough that if one partner in the marriage dies, the other partner’s assets are protected, and any shared wealth is not taxed.

One of the most time-trusted methods of escaping the estate tax is a bypass trust- known more familiarly as a “family trust”. This trust is typically used to set up a trust-fund. The money which is set aside in a trust fund or other tax sheltered annuity (another common example is a charitable trust), is not taxable by the government. The surviving spouse can continue to live on whatever interest the fund might bear. In some cases, he or she can actually use a small percentage of the principal as well. Lawyers in Brooklyn and The Bronx are constantly trying to improve their handling of these problems.

According to the New York Estate Planning Lawyer we spoke with, the new tax law enacted at the end of 2010 could spell good news for married couples trying to plan their estate. By significantly raising the exemption and making those exemptions portable (in other words, transferable from one spouse to another in the event of death), the federal government has given couples the option of leaving funds directly to one another, without going through a trust or other tax shelter.

Published on: July 28, 2011

New Tax Law Changes the Game

by Stephen Bilkis

The Estate Planning community is in a buzz over a new tax law approved by president Obama in late December of 2010. The Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010, or TRA 2010 for short, is a “game-changer,” one New York Estate Planning Lawyer is saying. In the past, the entire estate planning business revolved around estate taxes, and how those taxes were applied. In light of the new law, these taxes represent a much smaller hurdle to the industry at large. Lawyers in The Bronx and Staten Island are very aware that laws can change at any time.

If you are a New York Estate Planning Lawyer, and are considering giving your congressional representative a thank-you call, you are certainly not alone; but I would caution you to first read the fine print of the law. While no law is ever completely permanent, this law comes with an expiration date. After two years, the law is slated for review. If it is not reviewed and reinstated at that point, then estate tax law will effectively be reset to the levels present before the law was enacted.

On the other side of the equation, one New York Estate Planning Lawyer claims that this new law sounds the death knell for the Estate Tax in general. He contends that under the New TRA law, the value of collectible Estate Taxes is now so small as to be almost negligible, and would be a waste of IRS manpower to even bother to collect. Only time will tell whether the new law will act as a temporary tax relief mechanism, or as a stepping stone to Estate Tax repeal.

Published on: July 24, 2011

Thoughts on the New Estate Tax

by Stephen Bilkis

Every good New York Estate Planning Lawyer knows that estate panning is about preparing for the unthinkable. They frequently work with people for whom the prognosis is poor, stepping in to facilitate estate planning, long-term care planning, or to establish and administrate the estate after the death of a loved one.

Unfortunately, even the most seasoned New York Estate Planning Lawyer cannot plan for the unexpected when the source of confusion is the federal government, as has been the case in recent years. Estate planning lawyers rely heavily on the ability to map out the future for the people they work with- to meet with a client, and give them a picture of what the taxation structure will be like for the next five or ten years. Attorneys in Queens and New York are aware of any changes which take place in these areas.

The estate planning community has been in a state of flux over the past year. Because Congress failed to make a prompt decision regarding estate tax legislation, no estate taxes were imposed by the internal revenue service for tax year 2010. Nearing the end of the congressional year, congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which contains significant cuts and changes to the current estate tax laws.

Published on: July 21, 2011

Canadians on the Hook for US Estate Tax

by Stephen Bilkis

Think that Canadians are exempt from paying estate tax? One New York Estate Planning Lawyer says you could be wrong. Even Canadians who have never so much has set foot on US soil are on the hook for estate tax in many situations, if they don’t take the right precautions in advance.

According to United States tax laws, the estate tax can be levied against any person, regardless of nationality, who owns “US situs property”. This ambiguous term can be applied on a number of different levels, but broadly means anything that exists (either physically, or in some cases hypothetically), within the borders of the United States. A New York Estate Planning Lawyer gave us some examples of what might qualify for the estate tax. An obvious example would be either a house or a tract of land. Less obvious candidates for this tax would be things like bonds purchased from the US government, or stocks in a company headquartered in the United States. Non US residents who own such property can be subjected to the estate tax at the same rate as a US citizen would be. Lawyers in Manhattan and Nassau Count will be glad to counsel their Canadian clients.

For this reason, it’s critically important that as a Canadian citizen you carefully evaluate your tax exposure well in advance. Because ties between the US and Canada are so close, it can be very difficult to sort out your assets, and make an accurate determination, so consider calling a New York Estate Planning Lawyer, who can help walk you through the process.

Published on: April 21, 2011

Julia Eckhart died leaving two children

by Stephen Bilkis

August 13, 1970, Julia Eckhart died leaving two children, Charlotte Eckart and Frank Darmody. In her will that was dated August 4, 1966, she left each of them the sum of $50 and the rest to Watch Tower Bible and Tract Society of Pennsylvania. The will was admitted to probate and daughter, Ms. Eckart and Mr. Darmody submitted intent to contest the will. This is because of the size of the estate distributed by the will. A New York Estate Litigation Lawyer says that in the Estates, Power and Trusts Law, gifts to a charitable institution should not be more than half of the estate if contested by a descendant or parent. The law further states that the person can only contest if they are to receive a monetary benefit if the contest is successful as the beneficiary of the will.

Being the children of the deceased is not questionable. What needs to be decided on is if they have the right because they will receive a pecuniary benefit. The executor’s point of view was that the children did not have the right as the will expressed that Mrs. Eckhart, the deceased, did not want to give her children more than the $50, she provided for each of them. He relied on the case of Joseph Cairo as an example. The Cairo case had the specific words that said that the deceased did not wish to give the grandson, Joseph Cairo, anything from the estate. The grandson was not going to benefit from a successful contest.

In this matter, according to a report, the deceased placed her relatives in different levels as her children got $50 inheritance while the others did not. There was nothing that specifically or expressly stated she wished they do not receive anything more than the $50, she had appropriated in her will. The $50 in this case is insignificant. It does not show the intent of the testatrix if she wished to take away inheritance from her children. The law takes out intention with its provision. It keeps only what is stated in the will.