The Biggest Focus of Estate Planning is Now Basis (or Why You Should Not Make a Simple Gift of Assets to Your Children).
Basis is the cost of purchasing the asset. For real estate, it is the cost, plus any closing costs and improvements made later. Basis is important, because upon the sale of the property, capital gains liability is calculated based on the difference between the sale price and the basis.Carry Over Basis:...
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A Third of Americans Spend Their Entire Inheritance Within Two Years!
A researcher at Ohio State University found that Americans who receive an inheritance save about half of it and spend, donate or lose the rest. However, almost 30% of Americans who receive the inheritance had negative savings rate within 2 years of receiving the inheritance, meaning that they spent it all.There are strong...
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Leaving Real Estate Property to More Than One Heir May Cause Future Problems
Property partnership may end for a variety of reasons. One common category of circumstances when real estate litigation occurs involves siblings who inherit property from their parents and have different wishes. Multiple problems can arise. One sibling may want to live in the property while the other one wants to rent it out....
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Can You Avoid a 5 Year Penalty for Uncompensated Transfers?
Medicaid imposes a transfer penalty that can last for up to 5 years for all uncompensated transfers made prior to the application for nursing home Medicaid. This provision makes crisis planning for nursing home not efficient. Yet many people are reluctant to transfer their assets ahead of time and impoverish themselves, because, of...
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Can Court Reform a Will When the Attorney Made a Drafting Mistake?
In a recent New York case, a Will provided for disposition of 2/3 of the property (leaving property to decedent’s siblings, nieces and nephews) and was silent about the disposition of the remaining 1/3. In re Isasi-Diaz, NYLJ, Mar. 28, 2014, p. 35 (Sur. Ct., N.Y.Co.) (Mella, S.) The attorney-draftsman provided an affidavit...
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What are Gifts and how much can you gift and receive without paying taxes?
What is a gift: In general, a gift is the value of the property transferred in excess of the value of any consideration received therefore. What is the current gift tax rate: The current federal gift tax rate (similar to the current federal top estate rate) is 40%. However, this rate is only...
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Power of Attorney Printed From the Internet Was Found Invalid
Plaintiff tried to bring a personal injury lawsuit against a College on behalf of his daughter, acting under authority of a Power of Attorney. The Power of Attorney was found and printed from the internet, and was not prepared by an attorney. The defendant argued that the plaintiff lacked authority to bring the...
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Are relatives required to pay for nursing home care?
A nursing home is prohibited from requiring a third party to guarantee payment from his own funds to the facility as a condition of admission or continued stay of another party. Any attempt by the nursing home to do so is a blatant violation of the law, and may be reported to the...
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What is Long Term Care Insurance and New York State Partnership for Long Term Care
Many seniors are not aware that Medicare does not pay for custodial long term care. An individual suffering from Alzheimer’s disease or dementia, which requires assistance with feeding, bathing, and taking oral medications will not be covered by Medicare not by a Medigap insurance. The only way of paying for custodial long term...
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Can relatives supplement Medicaid covered nursing home care by paying for private nurses and private rooms?
Even though this concept appears reasonable (after all, most nursing homes are short on staff and rooms are semi-private at best), Medicaid does not permit it. Medicaid is a payor of last resort: if there are any available sources of payment then these sources must be used first. If a resident,...
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