A  life estate is a planning tool that is widely used to avoid probate, or help ensure your desired distribution of your real estate after death. However, it also features several significant drawbacks that must be carefully considered. How Do Life Estates Work? Basically, a life estate is a binding legal arrangement in which the […]

1. Simple Trust: A simple trust requires all income to be distributed annually to named beneficiaries. Income of the trust is taxable to recipient. 2. Complex Trust:   A complex trust does not require all income to be distributed annually. The trust provides that income may be distributed to beneficiaries or accumulated.   Income of the trust is […]

I. LIFE ESTATES 1. Definition:      a. An estate is used to express the nature, duration or extent of an interest in land. A life estate is an estate which is measured by the life of a specified person, by the joint lives of two or more specified persons, of by the last survivor […]

I. ABUSE BY RELATIVES, CAREGIVERS, POWERS OF ATTORNEY/GUARDIANS, OR TRUSTED OTHERS 1. Common Perpetrators   Common perpetrators include “anybody” such as trustees/fiduciaries, children, family members, caretakers, home aides, nurses, attorneys, agents, neighbors, etc.  a. Top Liability Claims and Causes of Action   Breach of Fiduciary Duty:  A fiduciary is a person who undertakes to act in the […]

I. Impact of Medicaid Requirements in Drafting Trusts Medicaid rules differ from the various types of trusts. Below are the three (3) different types of trusts and the impact of Medicaid requirements for each: 1. Revocable Trusts According to 18 NYCRR §360-4.5(b)(2), the trust principal and income of a revocable trust must be considered an […]

I. CHARITABLE DEDUCTION PLANNING a.Charitable Gifts: Gifts to qualified charities are income tax deductible.  In addition, the charitable component of a split interest trust (one where a portion of the trust has a charitable beneficiary, and another portion has a non-charitable beneficiary) is a reduction of total taxable gifts made during the year.  The deduction […]

I.PROTECTING THE RESIDENCE a. Life Estates             An estate is used to express the nature, duration or extent of an interest in land. A life estate is an estate which is measured by the life of a specified person, by the joint lives of two or more specified persons, of by the last survivor of […]

I. CHOOSING THE STRATEGY TO USE FOR DIFFERENT TYPES OF PROPERTY a. Real Property A qualified personal residence trust (“QPRT”) is a technique for gifting residential property at discounted values.  The QPRT is an irrevocable trust, which becomes the legal owner of the home during the trust term.  The grantor would continue to live in […]

In certain situations transferring a residence with the retention by the owner of a life estate is a common technique. The life estate provides the transferor with a level of comfort in knowing that their legal right to remain in the property for life is reserved in the deed, and that the life estate cannot […]

I. Estate Planning Downturn There has been a massive downturn for Estate Planners since 2012, especially for those with clients whose net worth is under $11mm. The life insurance industry has also reported major declines in sales due to the inability of agents to convince clients that potential estate taxes create the need for permanent […]