Schanker and Schanker PLLC is a premier Estate Planning law firm. We offer legal services for sophisticated Estate and Gift Tax planning, Decedent Estate Administration and Probate services, Business Succession Planning, Charitable Giving, Special Needs Planning for persons with disabilities, simple Will planning, and all aspects of Elder Law planning including Medicaid planning and applications. Our website, www.schankerlawfirm.com, provides detailed information about our practice and the services we offer. It also is an excellent resource for articles of interest about Estate Planning and Estate and Gift Tax Laws. A copy of each newsletter is always available on our website. Estate Planning is so much more than just tax planning. There is a considerable decisionmaking process. Schanker and Schanker PLLC has over 40 years of experience in counseling clients for their Estate Planning needs.

The Corporate Transparency Act:
Have you Complied?

If you have formed a Corporation, a Business Partnership, a Family Limited Partnership, a Limited Liability Company or other similar entity in connection with your estate planning, home ownership, or other personal/business reasons, you may be required to report information regarding the ownership of these entities to the Federal government under the Corporate Transparency Act. The Corporate Transparency Act ( the “CTA”) is a Federal Law that became effective as of January 1, 2024. It requires “Qualified Reporting Companies” to disclose their “Beneficial Owners” and control structures to the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury. A “Beneficial Owner” is an individual who directly or indirectly exercises substantial control over the reporting entity or owns, individually or jointly, or controls at least 25 percent of the entity. The “Qualified Reporting Companies” must report their beneficial ownership and control structures which may include identifying Trust Grantors (creators), Trustees, and, possibly, Beneficiaries. The purpose of the CTA is to thwart illegal and illicit financial activities, such as money laundering, financing terrorism, tax fraud, etc. The data is stored in a secure, confidential and non-public Federal database.

Reporting requirements includes divulging the full legal name, date of birth, current residential address or business street address and an identification number from an acceptable identification document (ex. Passport or driver’s license), along with a photocopy of such document, and Taxpayer/Social Security Number for each “beneficial owner” to FinCEN. The reported information to FinCEN will be maintained under strict confidentiality and may only be disclosed under very limited circumstances, such as a request by a federal agency engaged in national security, intelligence, or enforcement of the law.

Reporting deadlines for entities created on or after January 1, 2024, but before January 1, 2025, the initial reports are due within 90 days from the creation of the entity. For entities created on or after January 1, 2025, the initial reports are due within 30 days from the creation of the entity. For entities created prior to January 1, 2024, their reporting deadline is December 31, 2024.
Additional information and guidance may be found on www.fincen.gov. You can also utilize https://www.unitedcorporate.com/corporate-transparency-act/ as another resource. You may have already received information about this directly from the government. This is a strict requirement and the consequences for non-compliance can include monetary fines and possibly criminal prosecution. Please contact Schanker and Schanker PLLC if you have any questions or need additional resources to fulfill your requirements in a timely manner.

Ok, I Have a Will, is My Estate Planning Done?

Probate is a proceeding in Surrogate’s Court where the Will of a deceased individual is verified and a fiduciary is appointed to administer the estate of the decedent, pursuant to that said Will. The named Executor is given the authority to act by “Letters Testamentary”, which are issued by the Court.

The Probate process is too long, and this is true even for deceased individuals who leave behind small and simple estates. There is a backlog in the New York Court systems which is causing the process to last longer than it was designed to. This slow process causes not only frustration, but also confusion which inevitably exacerbates the grieving process. Notably, two of the worst Probate Jurisdictions in the United States include New York and Florida.

Probate is not free. First, there will be the legal fees of the attorney you hire to commence and file the Probate Petition to the Surrogate’s Court. Second, the Court has a range of filing fees based upon the value of the estate of the deceased. For example, if the value of the property of the deceased is between $10,000-$20,000, then the filing fee to the Court would be $75. However, if the estate is valued at $500,000 or more, the Court imposes a filing fee of $1,250.

At this point you may be asking yourself; how can I prevent my estate from going through Probate? A Revocable Living Trust is a valuable tool that is used to circumvent Probate, as its primary purpose is to avoid Probate with respect to the assets that have been placed into the Trust during your lifetime. A Revocable Living Trust is commonly referred to as a “Will Substitute”, because, like a Will, it directs distribution of your trust assets at the time of death. Thus, assets titled in the name of the Revocable Living Trust will pass per your direction at the time of your death, immediately and without Court intervention. You are the sole Trustee of your Trust during your lifetime and while you are competent. these very real and very significant issues.
Additionally, during your lifetime, you will have full use and control of any assets assigned to your Revocable Living Trust. There is absolutely no effect on your ownership, use, or enjoyment of assets, nor is there any tax consequences or income tax reporting requirements. To further discuss avoiding the hassles of Probate and the creation of a Revocable Living Trust based Estate Plan, schedule an appointment with Schanker and Schanker PLLC.

The Federal Estate Tax Exemption to be Reduced; Lifetime Gifting to the Rescue!

As of January 1, 2026, the Federal Estate Tax Exemption is scheduled to revert from what is currently $13,610,000 per person ($27,220,000 for married spouses via a Portability election upon the first death) to what is expected to be approximately $7 million per person ($14,000,000 with the Portability election between spouses at the time of the first death). Now is the time to consider smart uses of the current Lifetime Gift Tax Exemption in order to mitigate or even eliminate a 40% tax on amounts in excess of the Exemptions.

The Federal Estate Tax Exemption is unified with the Federal Lifetime Gift Tax Exemption (there is no Gift Tax in New York, New Jersey, or Florida). The more you use of your Lifetime Gift Tax Exemption, the less of the Federal Estate Tax exemption will be available upon death. However, lifetime gifting not only alleviates an impending Estate Tax but also removes all appreciation from the value of your taxable Estate.

There are many strategies available to successfully use the Lifetime Gift Tax Exemption.The most common issue people have with gifting is anxiety about loss of control and the inability to access the gifted funds.

There are gifting strategies that allow you to gift assets that are reported on a discounted value to the IRS (via the Gift Tax Return). The underlying justification for this is that the actual gift comes with some “strings” attached for the beneficiaries (they don’t have control, voting rights, have to wait for a term of years for access). Such mechanisms are known as Family Limited Partnerships, Grantor Retained Annuity Trusts, Qualified Personal Residence Trusts, and many more.

The Spousal Lifetime Access Trust (a “SLAT”) has been tremendously popular. A “SLAT” is an Irrevocable Trust created by one spouse (the “donor spouse”) for the primary benefit of the other spouse (the “beneficiary spouse”). The beneficiary spouse has access to the assets in the SLAT, subject to limitations. Upon death, whatever remains in the SLAT is completely Estate Tax free even if the value of what was gifted far exceeds a greatly reduced Federal Estate Tax Exemption in effect at such time.

The beneficiary spouse of a SLAT cannot be a sole Trustee with exclusive control. He/she must act with a Co-Trustee and the Co-Trustee must exclusively control the beneficiary spouses access to the SLAT (here, it is very wise to name someone who works well with the beneficiary spouse). The donor spouse’s access to the SLAT via the beneficiary spouse’s interest ends upon the beneficiary spouse’s death.

There are also rules pertaining to how these spousal Trusts are drafted which your experienced drafting Attorney will be very well apprised of. SLATs also offer protection from the claims of creditors of both the donor and the beneficiary spouse. Once the donor spouse transfers assets into the SLAT, parting with his/her control over the asset, as well as relinquishing any interest in the asset, the asset shall then be free from the claims of the donor spouse’s creditors (assuming the transfer of the asset to the SLAT is not a fraudulent conveyance). Additionally, if the terms of the SLAT include a provision which prevents the assignment of the assets within the SLAT by the beneficiaries of the trust and the beneficiary spouse receives income or principal for his/ her health, maintenance, and support (only in the discretion of the Co-Trustee), then the assets in the SLAT should also be exempt from the creditors of the beneficiary spouse.

SLATs are a wonderful tool to use to plan for the reduction in the Federal Estate Tax exemption. If you would like more information about Lifetime Gifting strategies, including creating an estate plan with a SLAT, we encourage you to contact us for a complimentary initial consultation.

The Schanker and Schanker PLLC Team

We are proud to welcome Ana Rodriguez back as our “asset transfer” paralegal. Ana first joined Schanker and Schanker PLLC in 2011 and is dedicated to assisting clients with all titling and beneficiary designations in connection with various types of Trusts, business entities, real estate, life insurance, retirement benefits, etc. This is an extremely valuable service performed by a truly talented and hardworking professional. Ana speaks both English and Spanish fluently.

We welcome Daniella Bona, who joined our team in 2023 as a legal assistant. Daniella deals with clients directly, on a daily basis, coordinating client meetings, assisting Attorneys with correspondence, and administrative duties. She works with Kathy D’Andrea, a Legal Assistant who has been a valued member of our firm since 2014.

We are also proud to welcome Blaire Byron, who joined us in 2023 as a Paralegal assisting Ana Rodriguez with the “asset transfer” tasks. Blaire was a New York City teacher for fifteen years and brings her valued patience, organizational skills, and talent to our team.

We value every member of the Schanker and Schanker PLLC team. We also have two, long-time drafting Paralegals, assisting the Attorneys in document production. Michele McCann joined Schanker and Schanker PLLC in 2011 and Amy Kaszycki joined our team in 2006. Stacy Kaszycki is our esteemed Office Manager, having joined our team in 1993.

Every member of this firm brings something extraordinary to the work experience and to the client experience. Steven M. Schanker, Esq., Andrea B. Schanker, Esq., R. Mark Hochberg, Esq. and Nicole Marie Grube, Esq. comprise the exceptional team of Attorneys here at Schanker and Schanker PLLC.