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November 2015 Archives

Planning an estate in New York

Few people want to think about their death or their spouse's death, and this is probably one of the reasons that a third of couples surveyed by NerdWallet do not have life insurance. It is important that people who are married plan for the passing of their spouse, especially if they have children. To ensure that people are prepared for the worst, they should understand how much money they will need if their spouse passes away as well as getting documentation in order.

Long-term advantages of a dynasty trust

Although many New York residents understand that a trust can be helpful for minimizing the impact of situations like probate on an estate, they may not be aware of different types of trusts. Those with significant wealth, for example, might consider the use of a dynasty trust to provide a source of funds not only to their children but also to future generations. This type of trust offers some tax advantages as a grantor plans strategically around the federal gift tax exemption, which for 2015 is $5.43 million. By funding a trust with less than this amount, the tax-protected resources included in the trust have the ability to grow tax-free.

Preventing lapses in long-term care insurance coverage

Many New Yorkers purchase long-term care insurance in order to protect their estates and their families from the exorbitant costs associated with needing long-term treatment later in life. A recent report indicates that a major problem exists with long-term care insurance, however, as many elderly people forget to make their payments, allowing their policies to lapse.

Understanding the gift-splitting election

Some New Yorkers may take advantage of the gift-splitting election, through which each spouse may agree to split a gift to a third party in order to use both of their annual exclusions. This can help them avoid incurring a gift tax, but a recent case involving gift-splitting demonstrates couples need to be aware of certain things.