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Trusts

Thursday, March 15, 2018

Must an Executor or a Trustee provide an Accounting?


Being an Executor of an Estate or a Trustee of a Trust comes with having fiduciary responsibility to the ultimate beneficiaries. One such responsibility is to provide an accounting: a report of all the revenue and expenses.

There are several instances where an accounting might be done:

  1. Usually, the Executor or a Trustee will provide an informal accounting prior to making the final distribution from the Estate or the Trust. As part of this process, the Executor or Trustee will ask the beneficiary to sign a Release and Waiver Agreement, designed to protect the Executor or Trustee from liability.

  2. Sometimes, the beneficiaries may request an accounting.
    Read more . . .


Thursday, January 11, 2018

Simple Steps You Can Take Now to Protect Your Assets


As discussed in the previous article, there are very few of your assets that are protected from creditors in the event of a lawsuit. There are some simple steps that you can take to address your asset’s vulnerability to attacks by creditors.

  1. Buy insurance. You should have a liability insurance policy on your car, on your home, on your business, and an umbrella policy.

  2. Review ownership of assets.


Read more . . .


Thursday, December 14, 2017

Second Marriages: Causes of Family Strife!

When spouses divorce, there are often children left from first marriage. When one of the spouses remarries, he should be very careful that the children from the first marriage do not get disinherited.

The second spouse, who is often much younger and less financially secure, may exert pressure on her husband to provide for her in the event of his death.  The second spouse may have new children, whom the father sees on a daily basis. Simultaneously, the remarried husband may not see the children from first marriage as often (due to geography or ill-feelings from both sides).


Read more . . .


Thursday, October 12, 2017

Are you at risk of getting sued, if you agree to act as a Fiduciary (Executors, Trustees and Agents under Power of Attorney)?


Trust and estate litigation is on the rise. The conflict can arise due to beneficiaries who feel they were entitled to more money or Trustees, who are supposed to act as fiduciaries with care, loyalty and impartiality, but often don’t.

Unfortunately, you cannot plan for every contingency. You hope that the Trustee that you picked will act as a proper fiduciary, will not steal the beneficiary’s money and will act in accordance with the Trust’s provisions. You also hope that beneficiaries will honor the wishes of the Grantor, even when the Trust provides for unequal distributions.


Read more . . .


Tuesday, September 26, 2017

You have a Trust? When DO beneficiaries find out about money left to them ?


Clients often establish Trusts for the purpose of deferring distributions to beneficiaries. These Trusts are usually established to protect assets from risks such as mismanagement, imprudent spending, creditors and divorce.

But when do Trust beneficiaries have to receive information about the Trust and the assets? This question is different from the one about when the beneficiaries should start receiving trust distributions. A grandfather may establish a Trust with $1 million for the benefit of his two young grandchildren, name his accountant as the Trustee, and provide that grandchildren will receive the money outright once they turn 30. Do the grandchildren have a right to know about this money before they turn 30? 

A parent may not want the child to find out about the money for many different reasons.


Read more . . .


Tuesday, April 18, 2017

Is an Irrevocable Trust really that Irrevocable?

The word “Irrevocable” usually implies no ability to change. Most people believe that the Trustee is required to adhere to the wishes of the Trust’s creator, even though the times and circumstances have changed. Nonetheless, that is no longer true in the case of New York State.

There are two circumstances where an Irrevocable Trust may be changed or revoked.

The first circumstance exists when the Grantor of the Trust is still alive, wants to make a change and ALL the beneficiaries of the Trust agree with the proposed change.


Read more . . .


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.


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.
Read more . . .


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