Asset Protection

You must be very careful to store your Will properly, otherwise, if it cannot be found, the court is likely to consider it revoked and your assets will be distributed in accordance with intestacy rules.

In recent case In Re Scollan (2018), in which a valid Will could not be found, the court ruled that a presumption of revocation of the Will was not overcome.

There is a strong presumption that a Will known to be in the decedent's possession that cannot be located after the decedent's death was destroyed by the decedent with the intent to revoke. The retention of a copy of the Will by the decedent's attorney, decedent's statements regarding testamentary intentions, and suspicion that the Will was fraudulently destroyed (without supporting facts and circumstances) are not sufficient to overcome the presumption.

If you are afraid that your Will is at risk of being lost or destroyed (due to memory issues, the behavior of omitted beneficiaries, or any other reason), then your Will should be stored either in your attorney's office, a safe deposit box, or with a trusted friend.

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.  

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.

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. 

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.

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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:

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.

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:

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. 

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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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