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Articles Posted in Asset Protection

The COVID-19 pandemic has understandably left many people facing challenges. Remember that even the most difficult times often present opportunities, which currently includes an ideal situation to transfer assets to a loved one. The combination of decreased market values, lowered interest rates, and a high tax rate exemption has caused people to utilize several advantageous estate planning strategies.

# 1 – Making the Most of Gifting

Based on the value of assets, transferring property through gifting often requires individuals to consider estate taxes, gift taxes, and generation-skipping taxes. By transferring assets to loved ones while the asset’s value is temporarily at its lowest, you have the greatest chance possible of removing the assets from your taxable estate while making the most out of available exemptions. 

Creating a thoughtful estate plan is one of the greatest gifts anyone can leave their loved ones. It is important to update your will when major changes occur. These might include marriage, divorce, opening or closing a business, buying or selling real estate, or birth or death of an heir.

 
Estate planning is a process that helps ensure that your desires for distribution of your property and assets at death are carried out. During life, to complete an estate plan, you should consider the following: 

 

  •     Will: A will is the primary document that should be prepared while living, to be effective at death. A will is a written document expressing how you would like your estate to be distributed after death. Usually a will must be executed in the presence of two disinterested witness and be notarized. You must also have testamentary capacity (over the age of 18, of sound mind, and competent).

Settling an estate, after the loss of a loved one while grieving, is a difficult process. For the weeks and months that follow the funeral, handling the estate of a deceased individual may quickly overwhelm survivors. The steps outlined below provide a guide to survivors through this tumultuous time.

 
Immediately upon the death of a loved one

After notifying family members and close friends, contact a funeral director. The funeral director is able to assist with funeral and burial arrangements, publish an obituary, order the death certificate, and transport your loved one’s remains to the funeral home.

On August 15, 2019, the U.S. Food and Drug Administration (FDA) rolled out thirteen (13) proposed warnings in full-color utilizing graphics for rotation on cigarette packages, meant to encourage people to stop smoking or taking up the habit.

 
According to the U.S. Centers for Disease Control and Prevention, (CDC) the leading cause of preventable death in the U.S. is smoking.

  • Nearly 480,000 people die in the U.S. each year from smoking-related illnesses.

Alcohol and drug abuse among adults 60 years and older is underestimated and under-diagnosed. To caregivers, whether they are a spouse, adult child, or a home health aide, understanding how and where to get help for their loved one is critical to getting a person in treatment.

Nationwide, the U.S. Centers for Disease Control and Prevention (CDC) researchers found a 33.3 percent increase in older adult (ages 65 and older) deaths from heroin between 2014 and 2015 (heroin deaths for all ages rose only 21 percent).

Doctors fail to diagnose drug addiction in older adults because some of the symptoms experienced by alcohol and drug abusers mimic symptoms more common in older adults generally. Alcohol and drug abusers, like older adults, suffer from depression, diabetes, and dementia. It may be harder to attribute the cause to alcohol or drugs rather than old age, so treatment is under-diagnosed.

Millions of people find themselves in a middle class bind as they enter the midpoint of their retirement period. A good eight (8) to ten (10) years into retirement, many individuals are able to physically continue to live in their home and afford the upkeep and maintenance of their home with their retirement savings

 
Especially if the individual’s home is single-story, as health problems mature, many individuals will be physically able to maneuver their way around their home with little assistance. Multi-story homes become more difficult because climbing stairs may be a problem. Individuals in the midpoint of their retirement are generally still able to care for themselves. Many of them even hold permanent part-time jobs.

 
The sources of income for individuals in retirement are the fixed income they receive from a pension, an individual retirement account (IRA), Social Security, and 401K savings. Variable income is received through part-time job wages and other financial instruments like an annuity and cash savings.

The present-day court structure was established in 1691, when the New York Assembly established the New York Supreme Court of Judicature with the same common law jurisdiction as the King’s Bench, Common Pleas and Exchequer of England. The court was granted jurisdiction in equity in 1846 by statute, taking over equity matters from the Court of Chancery, and became a court of general common law and equity jurisdiction.

 
The current court structure — made up of 11 separate trial courts with varying jurisdictions — is complex and costly. For example, the Surrogate’s Court, established in 1787, has jurisdiction in probate and administration of estates matters. There is a Surrogate’s Court in each of the sixty-two (62) counties in New York. The Surrogate’s Courts also have concurrent jurisdiction with the Family Courts, over guardianships of the person and property of infants and adoption proceedings. Each county has a separate Family Court. So, there are sixty-two (62) of the courts as well. It is easy to see why any legal proceeding is expensive and the challenge of understanding which court can help you solve a problem.

 
Like any government agency, the New York State court system has a top executive, the Chief Judge Janet DiFiore. In her February state of the judiciary address, she announced an objective to “modernize” the state’s court system. Since then, many organizations and groups from a wide range of New York life – government groups, advocates against domestic violence, legal service providers, bar associations, community groups, and even private citizens – have banded together to lobby for court simplification.

My doctors always advise me that medications are meant to help me live better not longer. I always walk away from the experience scratching my head a bit because most of my medications have made me live longer but worse than before. The worst part of taking medication daily is remembering to take medication daily. It seems like such a simple task, but part of my brain still fights that I even have to take medications in the first place.

 
The second worst part of taking daily medications to live better are the side effects, especially interactions with other drugs. Some of the news is easy to ignore, and to a certain extent makes me laugh. For every story I read about the harmful effects of drinking coffee daily, there is another one saying daily coffee consumption would kill me. What kills me, however, is skipping a cup, the headache is the worst.

 
There is news you should pay attention to and at least discuss with your doctor if it raises any concern with the management of any of your health conditions.

Trusts are an excellent way to pass and preserve wealth privately. Two of the main benefits of using a trust to pass your assets – timeliness and cost – were explored in our previous post. Unlike the probate process that accompanies the settlement of an estate by will, a trust provides your heirs with immediate access to the trust benefits. The settlement of an estate passed by will can also gobble over 4% of an estate’s value, regardless of size. A third reason people use trusts to pass wealth is that they also enable the settlor, or donor, to minimize estate taxes, making more of your wealth available to your beneficiaries. 

Married couples

The death of a spouse is devastating. Whether the death was sudden or after a long illness, one day you are married and the other day you are not. The deceased spouse wants to be able to provide for the living spouse, especially if the living spouse is battling a chronic health condition. Paying for your spouse’s living expenses and medical care and expenses, including long-term medical care is of paramount importance to the deceased spouse. Married couples can benefit from the establishment of a revocable trust. 

Trusts are an excellent method for individuals with substantial assets to pass their wishes and wealth to others or a charitable organization when they pass. The key to an effective trust begins and ends with documentation. The proper documents, when drafted carefully by a qualified attorney, ensures your beneficiaries will reap the benefits of the trust and its property. A trust will fail, if the documentation is improper, negating the settlor’s wishes. 

What is a trust?

A trust is a legal document that contains the settlor’s final instructions about to whom his or her assets will pass when they die. There are three separate people involved in a trust creation, administration, and distribution: a settlor, trustee, and beneficiary. Their roles are as follows:

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