Katya Sverdlov Blog

Did you know? Code of Hammurabi (around 1792 BCE) is one of the oldest and most complete written collections of law. Hammurabi was the soxth king of Babylon.

The prologue to the Code expresses its purpose: “that the strong might not oppress the weak, that justice be given to orphan and widow”

Code has 252 separate provisions, arranged by subject (debts, family, personal injury, etc). Laws vary based on crime and social status of offender and victim.

The most famous principal of the Code is “an eye for an eye”.
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Did you know? The Code of Ur-Nammu, written around 2100 BCE, is the oldest found legislative code. It later influenced the code of Hammurabi.

It’s the first time when a schedule of predetermined consequences for violating rules of conduct was written. Most penalties were monetary: 15 shekels for perjury, 5 shekels for deflowering a man’s slave, 10 shekels for breaking a man’s bone. Yet murder and rape (of a free woman) were punishable by death.
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Talking about end of life issues with a loved one who is already sick is difficult. Your loved one may not be thinking clearly, may be in pain, and everyone is likely to be very emotional. That’s why it’s important to have this conversation early, while everyone is thinking clearly. A plan is likely to be empowering for all involved.

A parent may be resistant to receiving care and having crucial conversations with you because she is afraid of losing her way of life, losing privacy, getting old, not having sufficient financial assets, being a burden, having her money taken away from her, being thrown into a nursing home and dying.

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.

Section 1031 of the tax code allows those who sell a real estate property and invest the proceeds in a different real estate property to postpone capital gains taxes. It is a great strategy for investors: with a 1031 exchange, after a sale of a property you can use 100% of the proceeds to buy a new building; without 1031, if you had to pay capital gains taxes, you would only be able to reinvest approximately 65% of the proceeds.

This provision dates back to the 1920s. Yet both Democrats and recently Republicans have talked about eliminating it. The provision is viewed as a loophole, and all loopholes are currently getting reviewed, as part of the overall package of decrease in tax rates.

Have you always wondered if you need an estate plan? Have you thought of doing it yourself, but were not sure if you are doing it right?

Take this FREE online evaluation and find out!

http://sverdlovlaw.com/index.aspx?TypeContent=CONTACTUS

Currently, the gift and estate tax threshold is $5.5MM per person ($11MM per married couple). Assets passing at death that are above  that threshold are taxed at 40%. Gifts made during lifetime that are above this threshold are also taxed at 40%. 

Less than 1 out of 550 of people who die have taxable estates.
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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.

According to recent research by the AARP, about 90 percent of seniors would like to stay in their own home as they age, even if they require day-to-day assistance with activities of daily living. With a rapidly increasing senior population, demand for quality in-home care is beginning to skyrocket.

In the past, in-home care was usually delivered by home care agencies, who would provide a home care aide, and take care of the back-end reporting and financial requirements. However, the cost structure is beginning to shift.

First, cases involving cognitive decline, such as Alzheimer’s disease, usually require round the clock care.
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Based on the most recent survey, 52% of Americans do not have a Will. Usually, not having a Will also means not having a Power of Attorney or a Health Care Proxy.

When I lecture about this issue, I can talk for at least an hour about the need for a Power of Attorney and what happens when people do not have one. Main reasons to get your planning done:

1. If you do not have a Power of Attorney, in the event of your incapacity, your family is likely to spend over $10,000 on guardianship costs and related legal fees. I’m talking about a $10,000 fee in a GOOD scenario, where everyone in the family is in agreement.
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One in three people who turn 65 end up in a nursing home. No one ever wants to go there, yet most of the time the family has no choice about this issue (it becomes dangerous to keep the person at home, the daily care required is too much for a home care aide, etc). 

In New York and in New Jersey nursing home now costs $15-$20K a month! The vast majority of people cannot pay this bill on their own, especially after years of retirement spending. Even if the person wants to stay at home, an average home care bill is $10-$12K a month, which, for most people is also unaffordable based on Social Security pensions and retirement savings.

Currently, Medicaid pays for home care and nursing home care.
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