Summer’s Here, And the Time Is Right, For Getting Your Estate Plan in Order!

Over the next few weeks, summer will usher in a fun-filled, relaxing three-month period where kids can say goodbye to their studies for the time being and adults can travel and enjoy everything the season has to offer. It would seem odd to think of this as the perfect time to work on your estate plan; in fact, with many companies offering summer hours and workloads generally lightening during the warm months, it is the perfect time to consider to get your estate plan in proper shape.

Where do you start? It all depends on what you’ve already done, but here are ten action items for you to consider while you’re making your vacation and travel plans:

  1. Have your initial planning documents drafted. You’ve been busy all year…and the year before that…and the year before that.   Taking the first step in getting your estate planning prepared may be the hardest, but once you begin, the process can be completed quickly and painlessly.   Initial documents include a last will and testament, a durable power of attorney and a health care proxy/living will.


  1. Review your existing documents to ensure they still fit your needs. Having an initial plan in place puts you ahead of most people, but that is only the starting point of the estate planning process.   Family, assets and health changes can affect what your wishes are. If you haven’t reviewed your documents recently, take the time to speak with your attorney to ensure that your wishes and intentions are still reflected in your documents.


  1. Fund your irrevocable and revocable trusts. Clients often forget that setting up a trust is a two-stage process.   First, the trust document is drafted to express how it will work and who will benefit from the assets. Second, the assets must be transferred into the trust. In particular, with irrevocable trusts, transfers should be made as soon as possible to avoid the imposition of the three-year rule if you die within three years of a transfer.


  1. Complete and/or update your beneficiary designations. Paid on death accounts and contracts such as retirement accounts, life insurance and annuities are amongst the easiest to claim after a loved one dies. Without the need to petition the court, these assets can be transferred quickly to the proper beneficiaries. However, without proper beneficiary designations, they can pass to the estate or to the wrong persons.


  1. Create or revise your assets list. Most estate attorneys, financial planners and other advisors will compile a list of your assets during the planning process, but the most accurate lists usually are self created. Updating or creating such a list will give you a better idea of where things stand with you and your family and can reveal that your assets have grown to the point where additional planning is needed.   Alternatively, in the event of your death, it can provide your heirs with a good roadmap of what assets need to be transferred and retitled.


  1. Review your life insurance. The amount, type and ownership of life insurance can change as you grow older and expand your family/assets. Many insurance agents provide audits of policies at no additional cost. Additionally, because life insurance is taxable only for estate tax purposes, changing the ownership of the policy to a life insurance trust is a great way to reduce the size of your taxable estate.


  1. Protect your family or small business. Business owners are often focused on the here and now and don’t take the time to consider what will happen to their business if and when they are no longer running it.   Many businesses lack the proper buy-sell agreements or even a proper organizational document to give co-owners and the owner’s family guidance over what happens to the business once the business owner leaves, retires or dies.


  1. Create a gifting plan. With the large increase to the federal estate tax exemption and the increased New York exemption, it might seem less important to consider gifting strategies. This is not true. For starters, individuals can now gift $15,000 (or $30,000 per married couple) to their beneficiaries every year. Additionally, through the use of trusts, the monies given to minors can be protected from waste and be available for usage for education and other expenses.   Finally, for those with estates nearing New York’s “estate tax cliff,” the lack of a New York specific gift tax continues to keep gifting as an important tool to reduce estate taxes.


  1. Consider Charitable Giving. For those with estate tax issues and philanthropic goals, setting up a structure to maximize your giving takes time and many state and federal approvals before you can begin giving. Summer gives you ample time to get the process started so that you can hopefully be ready to make contributions before the end of 2018.


  1. Understand your planning goals. Estate Planning attorneys and other advisors provide suggestions and advice based on what we know about the law and what others do.   But, without the input and understanding of what our client’s goals are, any plan we put in place will be incomplete.   With more time to contemplate your planning goals, you can help your advisors craft the right plan for you and your family.


Please contact for more information

Establishing a Charitable Legacy

When preparing an estate plan, many individuals wish to include a charitable component in their planning.  From a personal perspective, a charitable bequest allows an individual to benefit a group, institution or cause important to them and their families.  From a tax perspective, charitable planning can provide significant benefits to an individual and his estate.

The benefits of charitable or philanthropic planning can range from the tangible to conceptual.  Charitable contributions can reduce the size of a taxable estate while also providing a 100% charitable deduction for the value of the contribution.  Certain charitable vehicles can also create a guaranteed stream of income for the donor Charitable giving is also personally rewarding to donor and his or her family.  By using their wealth to help others, the donor establishes a legacy of giving that can continue from generation to generation in the donor’s family.

Charitable giving in an estate-planning context can take several forms.  Among the most common:

1)    Specific and General Charitable Gifts-Under the terms of a donor’s Will or Trust, a donor may leave a specific amount or specific percentage of their estate to charity.  The donor may choose a specific charity or leave the choice up to their fiduciaries.  The donor’s estate will be able to deduct the value of the gift from the value of his or her taxable estate.

2)    Charitable Annuities-Many public charities have established charitable annuities to provide donors with a steady stream of income for the rest of their lives.  The donor contributes a gift to the charity and receives an income payment for the rest of their life.  The annuity amount is determined by using the donor’s age, the value of the gift and the annuity rates used by the charity.  Using charitable annuities reduces the value of the donor’s taxable estate while creating a tax deduction equal to the gift less the present value of the annuity payments.

3)    Charitable Trusts-These trusts come in two main forms, charitable remainder trusts and charitable lead trusts.  Each includes an interest for a term of years and a remainder interest.  Charitable remainder trusts provide a lifetime income stream to a specific individual and leaves the remaining assets to a charity.  Conversely, a charitable lead trust provides a lifetime benefit to a charity and the remainder interest to the donor’s heirs.  The charitable deduction for both trusts is based on the value of the interest that the charity receives.

4)    Private Foundations-A private foundation is a nonprofit organization administered and controlled by a private individual or family.  The foundation is required to pay 5% of its corpus every year to qualified charities that are chosen by the foundation’s directors or trustees.  Families looking to make a long-term charitable investment may prefer the flexibility that a foundation provides.  A foundation can also serve as a source of family pride for the continued philanthropic work that a family engages in.

5)    Donor-Advised Funds-Donor Advised Funds provide similar benefits to a private foundation without the corresponding complexities.  The funds are run through a public charity and allow the donors to determine how the funds are distributed and what purposes the contributions are used for. Using donor advised funds can maximize a donor’s charitable deduction without the cost of a direct gift or the regulation of a private foundation or trust.

The goals behind any charitable gifting strategy may be different for each donor, but the benefits are universal.  After ensuring that your family is cared for financially, it is a great way to further enhance the legacy you leave behind to your family, friends and community.

Please contact for more information about charitable planning.