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Friday, August 26, 2016

Why would you want a Nevada Trust?


New York has a very strong policy against self-settled trusts. A self-settled trust is one where the Grantor transfers assets to an irrevocable trust but remains one of the Trust’s beneficiaries. While these transfers are legal, New York believes that they are “void as against creditors”. As a result, if the Grantor remains a beneficiary of this type of Trust in New York, his assets are not protected against creditors.

Nevada, however, together with approximately 12 other states, permits these types of trusts and protects the assets against creditors.
Read more . . .


Thursday, August 18, 2016

Joint Revocable Trusts vs. Parallel Documents (cost saving vs. peace of mind)


Joint Revocable Trust: Lots of spouses opt to create a joint revocable trust. It makes a lot of sense to do so for many people: First, a lot of assets are owned jointly, so it can be an extra hassle to separate them. Second, the kids are common, so the bequest of assets after death will be common. Third, there is little chance of divorce, so there is no need to separate the assets. Last, there estate is below the federal tax threshold, so the actual ownership may not matter.


Read more . . .


Wednesday, August 10, 2016

Rich and Famous Planning: Sumner Redstone – an estate plan that is embarrassment for the man, the family and the company?


Mr. Redstone’s fortune is estimated at $5 billion. He could afford the best legal plan in the world. Yet, despite the assets and despite the multitude of involved lawyers, his estate planning and his last years are turning out to be a mess.

Mr.


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Tuesday, August 2, 2016

Who will care for my dog?


When a couple owns a pet, the owners can assume that the survivor will continue caring for their pet (although that’s not necessarily true, at least in my own situation). What happens when a single person owns a pet? In 49 states (Minnesota is the only state that does not permit this) you can now create a pet trust.

A pet trust permits the grantor to set aside a certain amount of money to care for the pet upon the owner’s disability or death. The trustee of the trust will make regular payments to the pet caregiver. The grantor can make specific instructions regarding the care of the pet, including shelter, feeding and veterinary care.
Read more . . .


Monday, July 25, 2016

Executor of your Will: who should be named and what are his responsibilities?


An Executor is the person named in the Will who ensures that deceased person’s wishes are carried out after death, that all the assets are found, that all the debts are paid and all the money is distributed according to deceased person’s wishes.

Responsibilities: The duties of an executor include: finding the Will, hiring a probate lawyer to put together a probate petition (including getting all the signatures from all the necessary parties), filing the petition and the Will with the court in order to be appointed as an Executor by the court, appearing in court (if necessary), notifying credit cards companies and banks about death, setting up an estate bank account, filing an inventory of assets with the court, carrying out the wishes of the decedent (including selling the real estate and other assets, if necessary), paying all the necessary income and estate taxes, and distributing the assets to the beneficiaries.  

Who should you name: as you can see, the probate process can be long and complex. The executor should be someone responsible and capable of handling such a task. Usually people name relatives or friends, because they know that the person will carry out their wishes.


Read more . . .


Friday, July 15, 2016

Rich and Famous Planning: Lessons learned from Prince’s mistake


As most people by now know, the artist Prince died without a Will. The family is now set up for tens of thousands in legal costs and years of delay before the money gets distributed.

When a person dies without a Will, regardless of the size of his estate, numerous problems come up. These include:

  1. Executor. The person who will be named in charge of your estate may not be the person that you would have liked.


Read more . . .


Thursday, July 7, 2016

ABLE accounts


The newly enacted ABLE accounts permit people with disabilities to save money without jeopardizing their government benefits. Account holders can have up to $100,000 in these accounts without jeopardizing their SSI (Supplemental Security Income) benefits. Medicaid benefits do not get jeopardized regardless of the amount of money held in these accounts.

These accounts enable disabled individuals to hold money in their name without a need for a Supplemental Needs Trust. This can be very beneficial for people with limited assets.


Read more . . .


Wednesday, June 29, 2016

You may want to think twice before leaving an outright distribution and gift


There are many things that can go wrong with an outright distribution:

  1. Judgment creditor can seize a beneficiary’s inheritance

  2. Bankruptcy court can seize a beneficiary’s inheritance

  3. An incapacitated beneficiary can squander an inheritance before anyone can step in to help him.

  4. A divorce court can award some of the beneficiary’s inheritance to an ex-spouse

  5. If the beneficiary doesn’t plan properly himself, his spouse’s family can receive your money

A lifetime discretionary trust, set up either during your life or through a Will, can mitigate against some of these risks. Some of the benefits of a lifetime discretionary trust include:

  1. Protection from beneficiary’s liabilities

  2. Protection from beneficiary’s divorce

  3. Protection during beneficiary’s incapacity

  4. Protection from beneficiary’s profligacy 

Talk to an estate planning attorney to see if setting up a lifetime discretionary trust may be beneficial for your family.

Disclaimer: This article only offers general information.  Each situation is unique.
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Tuesday, June 21, 2016

Rich and Famous Planning: B.B. King’s Estate – 15 children, a few million dollar and legal battles for many years to come


B.B. King acknowledged 15 children from 15 different women during his life. 11 of the children survived him. Yet the executor of B.
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Monday, June 13, 2016

Retitling Assets and Designating Proper Beneficiaries


You may have completed a Will and a Power of Attorney (all by yourself). You may think that your estate plan is in order and you can rest easily. However, you are likely less than half way done!

In general, over half of all assets in the United States pass outside of probate. These include assets that are jointly titled (i.e.
Read more . . .


Wednesday, April 13, 2016

Estate and Income Tax Planning for non-US citizens. Part II – income and estate taxation of non-U.S. residents

Income Tax Planning: In general, non-U.S. residents are taxed only on U.S. sourced income.  If the income is considered to be effectively connected with a U.S. trade or business (“effectively connected income” or “ECI”) then that income is taxed at graduated rates on a net income basis. If, instead, the income is “fixed, determinable, annual or periodic” (“FDAP”) then it is subject to a flat 30% tax on gross income (or lower if there is an income tax treaty). FDAP income usually consists of interest, dividends, rents and royalties. Interest on U.S. bank deposit is exempt from U.S. tax for non-U.S. residents.

Estate and Gift Tax Planning.

Assets subject to gift and estate tax:  For U.S. residents the tax applies to property and assets situated everywhere in the world.   In contrast, non-U.S. residents are subject to a gift and estate tax only on U.S. real and tangible personal property.

Gift Tax Exclusions: Similar to a U.S. resident, a non-U.S. resident can make a tax-free annual gift up to $14,000, can make unlimited charitable gifts, and can make unlimited gifts on behalf of donees directly to educational or medical institutions.

Gifts to spouse. The amount of gift tax exclusion  depends on the citizenship of the donee spouse. A citizen spouse may receive unlimited gifts of U.S. assets from his spouse.  A non-citizen spouse can only receive $148,000 per year prior to a tax being imposed.

Estate Tax. U.S. citizens and residents have a $5.45MM estate tax exemption from federal taxes.  In contrast, a non-U.S. resident is permitted only a $60,000 exemption. All property situated in the United States and owned at the death of a non-U.S. resident is included in the U.S. taxable estate, including retirement assets and stocks. Some assets, such as bank accounts and life insurance proceeds, are excluded.

 

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship. ATTORNEY ADVERTISING


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