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Asset Protection

Saturday, March 23, 2019

7 Tips for Keeping Trusts Flexible in a Rapidly Changing World

One hundred years ago there were no commercial airplanes, women couldn't vote, the average family had 5 children, divorce was rare, children born outside of marriage had no inheritance rights, and surrogacy was virtually unheard of. In 2019 we have same-sex marriage, flexible gender identity, assisted reproductive technologies, digital assets, cryptocurrencies and an epidemic of lonely seniors. What will our society be like in 20 years?  The pace of change is increasing, so while you draft your documents today, make sure that these documents are sufficiently flexible to adapt to our unknown future.  


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Saturday, March 16, 2019

A To-do List To Protect The Identity Of A Loved One Who Passed Away

Unfortunately, identity theft is rampant and it doesn’t only involve the living.  

Here's an important checklist to ensure you aren't made vulnerable.


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Sunday, March 10, 2019

Celebrity Estate Planning Mistakes That Everyone Can Learn From

James Gandolfini: No Need to Pay Extra Taxes

The actor and producer most renowned for his role as mafia boss Tony Soprano left only 20% of the estate to his wife. The remainder was left to his children, friends, and relatives. Since his estate was above the estate tax threshold, the result was that approximately 55% of the estate's money went to pay the taxes and fees! 

He could have avoided this onerous payment. It would have been done by gifting assets during life, leaving more money to his wife directly (there is an unlimited marital deduction for a US citizen spouse) or by setting up a specialized trust which gave income for life to his spouse but left her with no control to dispose of the assets upon her death. 

Either way, with proper planning, millions of taxes could have been avoided. 


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Tuesday, December 18, 2018

What to Know About Tax Implications of Buying, Owning, and Selling Cryptocurrency


 

Buying, owning and selling virtual currency is all subject to the IRS supervision and must be recorded and reported properly to avoid severe tax penalties.

1.      Characteristics: Virtual currencies are treated as property, as opposed to currency for federal income tax purposes. As a result, basic tax principles applicable to property transactions also apply to Bitcoin transactions.


2.
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Friday, September 28, 2018

Snowbirds? Consider differences in State Law

If you spend some time in New York and some time in Florida, you may wish to consult your accountant about determining your domicile (as, depending on the answer, you will owe very different taxes). You may also think about consulting with two different local attorneys regarding your estate planning, as both New York and Florida have real differences in Will execution formalities, asset and homestead protection, Health Care and Power of Attorney languages, Medicaid eligibility rules and estate taxes. Consider this non-exclusive list of differences:


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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.


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Wednesday, January 3, 2018

What Assets are Protected from Creditors?

Regardless of the President that is sitting in the Oval Office, the litigious nature of our society is not going to change.  There are many instances in which a client can be sued, including but not limited to: injuring someone in a car accident, being sued for malpractice, involvement in a business dispute, or owning a rental property in which someone was injured.

Certain assets are exempt from creditors as a matter of public policy:


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Tuesday, May 16, 2017

Medicare does not pay for home care!


Even though some seniors may be entitled to home care through their Medicare benefits, it may be impossible for them to receive this needed care.

And that is why most people plan for Medicaid - not because they are trying to cheat the system, but because they have no other real choice. 

 

http://www.
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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.
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Wednesday, March 23, 2016

How to monetize an investment real estate property while minimizing taxes

There are many reasons why one would want to withdraw money from an investment real estate. Some of these reasons include: no longer willing to manage the property, no longer needing the income tax benefit, desiring liquidity or desiring diversification in one’s investments.

1. The easiest way of monetizing a real estate property is selling it. However, with a sale come a host of costs. These costs include brokerage fees and income taxes (both federal and state). Depending on the level of appreciation and on prior depreciation deductions, the gain can be quite substantial and may result in a net amount received that is significantly less than the sale price.

2. There are methods of minimizing the income taxes on the sale of the property. These methods include:

           a.    An installment sale. This is a method of sale where at least one payment occurs after the year in which the disposition took place. Under this method, gain is not taxed when the disposition occurs, gain is recognized gradually as the payments are received.

           b. Borrowing against the property. If one wants to create liquidity while retaining ownership of the property, one can borrow against it. There are no tax consequences to this method. Cash can be used for other purposes.

            c. Like-kind exchange under 1031. This method provides a tax-deferral mechanism. No federal gain or loss is recognized where a real estate property held for use in a trade or business or for investment is exchanged for another “like-kind” property. There are several specific steps that must be taken to qualify for the exemption under section 1031. 

            d. Contributing property to a Charitable Remainder Trust (“CRT”). If one is at least somewhat charitably inclined, one can contribute property to this trust, where specified payments are made to a non-charitable beneficiary for a number of years and the remainder goes to charity. There are many tax advantages to this transaction, the main one being that upon a sale of the property by the CRT, no federal income taxes are due.

 

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


Sunday, February 14, 2016

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 similarities in these spending habits with people who receive lottery winnings. Apparently, lottery winners save only 16 cents of every dollar won and have dramatically higher bankruptcy rates within 5 years after winning.

Of course, the inheritance that people receive may not be a large amount of money. The median inheritance for the past 30 years was $11,340. For those people who inherit $100,000 or more, the percentage of people who spent it all within two years dropped to 19%.

If you receive an inheritance (or a lottery winning) – be careful. I’ve seen bad financial advisors who have only their own interests at heart. I’ve also seen bad “friends” who convince unsophisticated people to invest in their ‘brilliant’ business schemes. There is no perfect answer about what to do with the money. But not spending it immediately would probably be the best advice!

 

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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