New York Probate and Estate Administration Lawyer Blog

Congress has adjourned for the election season, without doing anything about the uncertain state of taxes, a New York Estate Lawyer reports. Without anything being done, income taxes will rise for the middle class and the wealthy. The estate tax will rise to 55% for any assets over $1 million. Other tax provisions, like the one that protects 24 million families from the alternative minimum tax, have to be renewed or they will expire at the end of December.

“You would have thought we would have had some certainty by this point, but as we get closer to December 31, the uncertainty seems to be getting greater,” a prominent financial planner told a New York Estate Lawyer. President Obama plans to extend the Bush tax cuts for the middle class, but not for those who have incomes above $250,000. The top tax rate on income will rise more than 4% in 20111, while the tax on income from capital gains and dividends will rise 5%. And if Congress does nothing, the dividends tax will go all the way from 15% to 39.6%, matching the new income tax rate.

New York Estate Lawyers recommend moves like contributing to a 401(k), taking gains on taxable bonds, and gifting money to others at the maximum limits possible to avoid paying taxes on it later. Looking to the future, try to find big deductions to take when the tax rates rise (if they rise), or find ways to accelerate income forward, so it is taxed at the 2010 rates.

The Supreme Court in Britain gave prenuptial agreements more sway in divorce cases, bringing their laws closer to those in the United States, according a New York Estate Lawyer.

A former banker made an appeal to the Supreme Court, which was dismissed, to partially disregard the agreement he signed with a wealthy German heiress before they married in 1998. The agreement stated that neither would profit from the wealth of the other.

This case was very important to British lawyers, since it would grant precedent to follow in future cases involving prenuptial agreements, which were very popular in the United States and the rest of Europe, according to a New York Estate Lawyer.

With the return of the death tax looming large, many Americans are wondering what they can do. Largely seen as a way to exploit “We hate the rich” sentiments, the estate tax isn’t thought to make much logical sense, said an New York Estate Planning Lawyer. The money was already subject to income tax and gift taxes, so the added tax is just one last opportunity by the government to reach into a man’s pocket and take as much as he can. And, since the tax only targets “the rich” most people feel secure. They shouldn’t, notes an New York Estate Planning Lawyer. One million dollars is a lot of money to have in the bank, but not that much to have as an estate, reports an New York Estate Planning Lawyer. Take the entire value of a home, two cars, and a solid retirement fund and a million dollars arrives quicker than a hiccup. And the number isn’t indexed for inflation, so in a few years as wages naturally rise (as they always do) a million dollars becomes worth less and less, notes an New York Estate Planning Lawyer. There was a time when if a man made $20,000.00 a year, he was considered incredibly wealthy. However, today that same man would be near the poverty line. And that’s a key issue for many who opposed the death tax, said an New York Estate Planning Lawyer. It just stays the same, so in 10 years when a million dollars isn’t worth a million dollars anymore the government won’t care: it’ll take it all the same.

Planning for tomorrow needs to be done today. Contact an New York Estate Planning Attorney and take care of your future so your family doesn’t have to worry.

If you or a loved one is having trouble with the tangle of tax laws, a New York Estate Attorney is ready to assist you. You want to avoid all the legal troubles that come with money, or at least make them less problematic. Your best possible ally in that endeavor is a New York Estate Attorney.

It sounds ominous: the death tax. A tax on when you die. And, basically, that is what it is. Currently, the death tax is 0%. That means when you die all of your assets go to your heirs without taxation, those heirs may have to pay income taxes on the money received. However, unless Congress acts today the death tax will shoot up to 60% on some people on January 1st, said a New York Estate Planning Lawyer. This means that more than half of an estate valued at over one million dollars will go to the government. While this often sounds like no big deal to many people, it often is. The average family farm is valued at over one million dollars even though those who live on it may not consider themselves wealthy (and may in fact just barely scrape by). The confusion is that most people don’t truly understand what is at stake, said a New York Estate Planning Lawyer. It isn’t just that you have one million dollars in the bank, it’s the entirety of your estate. The average person who has worked their whole life and saved, bought a decent house, and has a couple of cars and a solid retirement fund might be surprised to learn that according to the government they are considered so wealthy that they no longer have the right to determine what happens with their money, noted a New York Estate Planning Lawyer. But, that’s exactly what is happening soon. And, again, this is all money that was originally subject to the income tax. It literally is a tax on simply dying.

Planning for your future is serious business. Money is at stake, often large sums of money, and an accomplished New York Estate Planning Attorney can help.

f you or a loved one is having trouble with the tangle of tax laws, a New York Estate Attorney is ready to assist you. You want to avoid all the legal troubles that come with money, or at least make them less problematic. Your best possible ally in that endeavor is a New York Estate Attorney.

You work your entire life. You wake up, do the right thing, refuse to cheat, play by the rules, pay your taxes, and eventually you’ve accumulated a nice nest egg. You want to live on it for a few years but know that it will ultimately go to your children. Why not, after all. You love them and you’ve lived your life for them for years. But, with new changes to the tax code taking effect on January 1st of 2011 you could find that the government will take up to sixty percent of your life savings, reports an New York Estate Lawyer. By making gifts to your children now many are finding that they’re avoid saddling relatives with hefty “death tax” bills later.

Giving property to family members in the immediacy isn’t always ideal. After all, many want to continue living in their house – the house they worked decades to make and maintain – and giving it away, even to a close relative, can be a difficult proposition, notes an New York Estate Lawyer. And just giving it away doesn’t relieve a person of all duties, as you will still need to pay the fair market rental value while you occupy the home.

Proper planning with an attorney can help alleviate many of these issues, as a trust can be set up to collect the “rental money” – and the beneficiaries of that trust can be almost anyone you choose, says an New York Estate Lawyer. There are a number of trusts available for use, some of which handle all of the dispensing of money and others which allow you to control it yourself, reminds an New York Estate Lawyer. Either way, planning for tomorrow helps ease today’s pains.

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No one is entirely sure what the federal estate tax rate will be next year, not even the people who set the rates, says a New York Estate Lawyer. It could be anywhere from 41% to 60%, depending upon how much the estate is worth when its owner dies – and it’s not the wealthiest who pay that highest rate.

A finance writer told a New York Estate Lawyer, “Under current law, come Jan. 1, 2011… the estate tax, defunct for 2010, will spring back to life, grabbing 55% of any assets over $1 million not to left to a spouse or charity.”

A CPA from Michigan, pointed out, however, that the 55% rate only applies to assets over $3 million. It’s 41% for assets between $1 million and $1.25 million. The rate is 43% between $1.25 million and $1.5 million, all the way up to 55% on $3 million estates, according to New York Estate Lawyers.

We tend to think of credit card debt as being a problem for younger generations but today more and more senior citizens are finding themselves saddled with incredibly high credit card debts. And this very high credit card debt is causing many senior citizens to file for bankruptcy, reports an New York Estate Lawyer. It is a sad trend, one that is slowly and quietly sweeping the nation. Unlike many younger Americans, who may use a credit card as a means to live a high lifestyle because they are not used to the responsibility that high credit limits carry, older senior citizens in America are using their credit cards to simply survive, notes an New York Estate Lawyer. These senior citizens have trouble making ends meet and are too ashamed to ask friends and relatives for help, says an New York Estate Lawyer. As such, they compile very very high credit card debts.

Sadly and tragically, the inevitable end for many of these senior citizens is bankruptcy. After maxing out their credit cards they find themselves with too much debt and not enough income, forcing many to file bankruptcy, reports an New York Estate Lawyer. A lifetime of work gone in a few years. Many senior citizens face a myriad of complex problems: they often have high medical expenses, children and grandchildren to provide for, and saddest of all: they do not have the time necessary to climb out of debt. All too often they reach a point where they simply cannot work any longer.

Proper estate planning can help head off many financial woes people face. Contact a New York Estate Attorney today to see what you can do to prepare for tomorrow.

Some of the wealthy elderly people in the United States feel compelled to give away what they would have normally passed on upon death, a New York Estate Lawyer reports. Congress has yet to vote upon the estate tax, which does not exist in 2010, but may come back in 2011, meaning a significant amount of any inheritance could be taken by the government if someone dies after December 31.

There are no taxes on inherited money for 2010, but the rate will go up to 55 percent if Congress does not do something in the post-election session, according to New York Estate Lawyers. So, there are two main things to do to save money: die in 2010, or transfer money to the family at the relatively low tax rate of 35 percent. The gift tax will also rise to 55 percent at the end of 2010 if Congress does nothing.

It is the usual practice of the government to keep estate taxes and gift taxes closely matched so the wealthy can’t use one method or the other to reduce the government’s cut. As of now, Americans can give away $13,000 tax-free, per person, up to a $1 million lifetime maximum. Once it gets past $1 million, gifts are taxed like an estate – except for this year, when the gift tax is only 35 percent, and the estate tax is nothing at all.

It sometimes comes as a surprise to heirs just what they’ve inherited. An estate can be a murky thing, even for people who plan them, a New York Estate Lawyer reports.

A good estate plan should theoretically show everything a particular person owns, but this doesn’t always happen. The owner of the estate might not even know exactly what he or she possesses, or may not be entirely forthcoming about the details for whatever reason.

A New York Estate Lawyer notes a case in which the children of a supposedly wealthy man learned their father was actually not worth very much at all. They knew he had some valuables stored in a safe deposit box, but when the box was opened only some old papers were inside. “We never did find out what happened to them,” an attorney told a New York Estate Lawyer.

New York Estate Lawyers have noticed something: Both financial planners and collectors do not tend to count the value of collections when it comes to looking at financial resources, including estate planning.

This often results in a parent instructing children to come and take the collection once the parent has passed on. If the collection is valuable and sold, the IRS is going to take note, which means the surviving children had better have some documentation that can prove they weren’t somehow circumventing tax law, a New York Estate Lawyer warns.

Should the collection be impossible to split equally between multiple children, that can be another problem. There is no way three people can split that classic car their father loved so much. Or they could not be especially interested in cars and decide to sell it and the rest of the collection – getting maybe 30 cents on the dollar for sale after taxes are paid.

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