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Schanker and Hochberg P.C. 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.schankerandsch.wpengine.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 will always be available
on our website.
Estate Planning is so much more than just tax planning. There is a considerable decision-making process. Schanker and Hochberg P.C has over 30 years of experience in counseling clients for their Estate Planning needs.
As always, we encourage feedback from our readers. If there are any topics you wish for us to specifically address or elaborate on, please email me at: andrea@schankerandsch.wpengine.com
Learning the Hard Way
We all recently learned an Estate Planning lesson from the very unfortunate and untimely death of celebrity actor James Gandolfini (best known for his role in The Sopranos as Tony Soprano). This extraordinarily talented and successful man had a poorly prepared Estate Plan which exposed all Estate matters to the public because he used a traditional Last Will and Testament instead of a Revocable Living Trust. Because of a virtual complete lack of any Estate Tax planning, more than fifty percent of his assets may become paid to the IRS and the State of New York. Further, with insufficient life insurance, the Estate will be forced to liquidate assets to pay the taxes which are due nine months from the date of death.
Mr. Gandolfini’s family, besides the terrible grief of their loss, are now subjected to much publicity concerning significant Estate Tax issues and decisions. Careful planning with an experienced Estate Planning Attorney could have prevented this unfortunate result.
Unique Assets and Valuable Collectables
Collecting is a popular passion for many people. We accumulate valuable collections based on our hobbies, investment strategies, and appreciation of the ‘finer things’ in life. After a number of years (or in many cases a lifetime) of collecting, it is easy to have accumulated a significantly valuable collection. Upon death, there can be distressing consequences if these collections have no planning in place.
1 Plan! Unique assets require unique planning. Do your heirs want your collections? Do they know who to contact to appraise the collection for Estate Taxation and/or sale? Do you want your valuable collection used as part of legacy planning? Are you using your collection as collateral for liquidity as an investment strategy? Are you charitably inclined? How is the best way to exclude the most value of your valuables from the taxable estate? Consider the possibilities.
2 An Estate has nine months from date of death to file and pay Estate Taxes (Federal and State). If the collection is forced to be liquidated, the Estate could take a big hit. The proceeds of sale could be significantly less than what the asset could be worth if it were to be sold in a better economy. Consider insurance.
3 Assess what you have and identify how you acquired the item(s) and what you paid for it. Keep records.
4 Determine ownership and authenticity of the collection. Believe it or not the United States (according to the FBI) is the world’s capital market for stolen art. Make sure your ‘one of a kind’ Chanel jacket collection, worn by Audrey Hepburn has some documentation to show that the jackets are actually Chanel and also actually worn by Ms. Hepburn herself.
5 Insure your collection. Thefts or damage can not only occur while you are alive but also after death while your estate is being administered. This is especially true if there is a period of time your home is left unoccupied after your death.
6 Let your children (heirs) know how or to whom they should consult for possible liquidation. For example, you should have a file identifying legitimate auction houses, appraisers and dealers.
Schanker & Hochberg, P.C. welcomes our new Associate Attorney:
Melanie A. Schanker, Esq.
Estate Planning for the Small Business Owner
SMALL BUSINESSES are privately owned corporations, partnerships or sole proprietorships and are commonly owned by more than one person. Growing a business is hard work. Special consideration should be paid to planning for disability, retirement, mental incapacity and death.
Disability
What happens if you, as the owner, become disabled and can no longer perform your duties for the business? Is disability insurance possible? Is a plan in place for your possible buy-out by a partner?
Retirement (the “Exit Strategy”)
What is the protocol for retirement? The most valuable asset you spend a lifetime building can be destroyed without an effective exit strategy.
Incapacity
Do you have a Durable General Power of Attorney in place so your interest in the business is represented on your behalf by someone you designate to act in your place upon incapacity.
Death
If your family inherits your share in the business, are they qualified to run the business? Do they want the business? Do they get along with any partners you have?
A “buy-sell” agreement is an excellent device to plan out the intricacies described above. It is a contract between co-owners which provides directions to follow in instances of disability, retirement, incapacity and death. It defines how to come up with a price should one owner wish to buy-out the other, often a point of argument between parties. A “plan” minimizes unnecessary costs and inevitable frustrations.
Schedule a complimentary appointment
to review existing Estate Planning documents in our Long Island Office, Manhattan Office, or our New Jersey office.
Contact us at our main telephone number at (631) 424-5400. Please see our website
at www.schankerandsch.wpengine.com
for our location addresses.
Items to be Aware of When Someone Dies
IN ADDITION to coping with the emotional stress of the death of a close family member or friend, the practical responsibility of settling an Estate can be overwhelming. From locating a Will to canceling a gym membership, there are many details one may not think of when presented with the death of someone close to them. The following is a brief description of some of the many things of which you should be aware:
1 If the Deceased had an Estate Plan and you are named as Executor or Trustee, contact the Estate Planning Attorney who prepared the documents and locate the original Will. Initial consultations about Estate Administration or Probate are usually complimentary.
2 Why would an Estate need an Attorney? Probate may be necessary in order to have the required authorization to distribute assets held in the Deceased’s name at time of death. An Estate Tax return is required to be filed with the State and the Internal Revenue Service if the taxable estate exceeds the thresholds.
3 Look for directions about bodily disposition, funeral arrangements and specific burial preferences which may have been specified in the Deceased’s Estate Plan.
4 Death Certificates. Make sure you obtain duplicates of the certified Death Certificates which are used to administer the Estate. A good number is usually 10-15. More can be obtained if necessary.
5 Some General Notifications Include:
a. Contact the Post Office to have mail forwarded (you will likely have to produce a death certificate to do this).
b. Contact the Social Security Administration to advise of the death and to find out if there are survivor benefits available if the Deceased has a surviving spouse. Please note, they will claw back the social security payment from the month in which the decedent passed away.
c. If the deceased was a Veteran and leaves behind a surviving spouse, contact the Veteran’s Administration to inquire as to any benefits available.
d. Contact the Health, Auto, and/or Property and Casualty Insurance providers to stop coverage and obtain a refund of any unused premiums.
e. Locate and identify information about ‘digital assets’ and the Deceased’s online presence in order to manage.
There is a tremendous amount of work potentially involved in settling the proverbial ‘affairs’ when someone dies. Organization is absolutely imperative. Schanker and Hochberg P.C. specializes in Estate Administration, Probate and the preparation and filing of Estate Tax returns. Professional guidance is often required and can prevent unnecessary time delays, expenses and potential negative legal implications of not representing the Deceased’s Estate properly.
Elder Law and Planning for Individuals with Disabilities
Schanker and Hochberg P.C. has incorporated planning for issues in the ‘aging community’ such as:
• Helping to evaluate ways to pay for long term care.
• Making sure the correct planning is in place in case of incompetency issues.
• Providing guidance on the best placement for an individual who needs long term care.
• Helping to identify the best course of action in managing the affairs of a person who has become incompetent to make decisions on their own.
• Article 81 Guardianship Proceedings (how you can represent a mentally incapacitated person who doesn’t have a Durable General Power of Attorney and/or Health Care Proxy).
• Fine tuning your Estate Planning when a beneficiary has ‘special needs’ or disabilities so that they do not become ineligible for certain Federal benefits.
Our consultations are comprehensive and provide a personalized and detailed evaluation of available options catered to the situation. There is a consultation fee for evaluations concerning Elder Law issues and planning for individuals with disabilities.
We also offer
a New York City location for your convenience.
Long Term Care – The Cost of Care and the Aging Population
MOST PEOPLE PLAN to save enough money for retirement, but is everyone prepared to pay for the cost of long term care? The cost of long term care should be a significant concern especially now that the oldest of the baby boomer generation turns 67 this year. Statistics tell us that 40% of the people past age 65 will need some type of nursing home care with the average stay lasting almost 2 ½ years. The average nursing home cost is $100,000 per year (on Long Island the average cost is $144,000 per year). Even for those who have adequate resources to cover this cost, the issue becomes depletion of their legacy intended to be left to the next generation. There are three main ways to pay for the cost of long term care (whether it is in-home or nursing home care); the best option depends on each individual’s situation:
Long Term Care Insurance
Advantages
• Flexibility in the details of your care whether it be in your home, in an assisted living center or a nursing home.
• Hybrid products. These products offer a death benefit (similar to life insurance policies) should the long term care coverage not be utilized.
• Possible Tax savings. You may even be eligible for a tax deduction for the premiums paid right off your income if you’re self-employed or as an itemized deduction if your medical expenses exceed 7.5% of your adjusted gross income.
Disadvantages
• Can be costly depending on the age at which you get it.
• If you don’t use it you lose it (unless you get the hybrid product mentioned above).
Partnership policies
• Approved for sale in most states. New York, Connecticut, New Jersey and Florida are among them.
• Allows people who have accumulated too many assets to qualify for regular Medicaid to keep their assets and still qualify to have Medicaid cover their expenses after their long term coverage is used under The Partnership (Medicaid Extended Coverage).
Medicaid (no, Medicare does not pay for Long Term Care)
Advantages
• The state pays, not you.
Disadvantages
• Inflexibility. The Medicaid Program mandates your care.
• Re-certification. You must re-certify annually to maintain coverage.
• Eligibility standards. If the applicant’s net available resources exceed the threshold or if the applicant’s net available income is above his/her income threshold he or she will be ineligible for Medicaid. To give you an idea, currently in New York, resource levels for a married couple are $21,150 (exempts personal belongings, one vehicle and primary residence if occupied by the applicant) and income levels are $1,175 per month for a couple.
Private
Advantages
• Preservation. If you don’t end up needing long-term care you can leave the money to your heirs.
• Flexibility. You choose your care.
Disadvantages
• Risk of running out of money for self and heirs. Expenses for long term care may run greater than planned.
Using Equity in your Home
• Keep home and do a Reverse Mortgage. This is a certain type of home loan that lets the homeowner get cash out of the equity in his/her home.
However, the homeowner must meet certain requirements:
a. Must be 62 years of age or older
b. Own home outright or have a low mortgage balance that can be paid off at the closing with the proceeds from the reverse loan
c. Must live in the home
Please also be aware it can be very costly.Also, when the home is sold or no longer used as the primary residence, the reverse mortgage must be repaid.
• Keep home and take out or increase mortgage or home equity line on property on property.
Many times long term care is far from people’s minds (especially at a young age), but the sooner one begins to think about paying for long term care, the more choices will be available down the road. This article is meant to outline some of the options and give the advantages and disadvantages associated with them. It may be worth having a discussion with your life insurance advisor on whether long term care insurance is right for you as compared to other options available.
Your Family Is Invited . . .
One thing is certain – we all die – 100% of us. However, the sad truth is that less than 50% of Americans actually plan for it. Estate planning is not just about yourself. It most often involves spouses, children and other people who play significant roles in your life. For this reason it can be valuable for them to have an understanding of what they need to know in case of your passing. Whether or not you have an existing estate plan, we invite you to come to our office for a complimentary consultation to either review your existing estate plan or review what would upon death happen without an estate plan. We welcome you to bring your family, friends, investment advisor, accountant, insurance advisor or any other person who you would like to be at the meeting.
The Schanker and Hochberg P.C. Paralegal Team: Michele McCann, Amy Fiderer, Nikki Willard, and Ana Rodriguez.
Paralegal Perspective – Nikki Willard
I have been a senior drafting Paralegal at Schanker and Hochberg for 9 years. During those years, I have drafted many estate plan documents for many clients. One thing I have observed during this time is that the best estate plans are those that are well thought out. I realize and understand that most people avoid thinking about their own deaths and how their estate should be distributed, and therefore don’t approach the subject until they are forced to by circumstances. When these important decisions are made hastily (for example, because a client is going away on vacation, about to have surgery or is facing serious health issues), decisions may be made that are not ideal for them or their families. I would encourage all clients to sit down with one of our attorneys and discuss their situations at length – this will help them develop a satisfactory estate plan that is in the best interest of everybody concerned.
Extensive Services at Schanker and Hochberg P.C.
- Complimentary Initial Consultations for Estate Planning, Probate and Estate Administration (not for matters of Elder Law or Special Needs Planning)
- Complimentary Annual Review meetings for existing clients
- Complimentary Family meetings for existing clients
- Tax alert services for existing clients
Our main office is housed in an elegantly restored Victorian structure in the heart of Huntington Village. Here, we welcome you and your family into a relaxing, warm setting where we will work together to improve your circumstances and achieve your goals.
To better serve our clients and their families, we also have convenient office locations in Midtown Manhattan and New Jersey; we also offer our services to clientele in Florida.
GENERAL DISCLAIMER: While we hope this newsletter provides useful information, please know that this newsletter does not predict or guarantee the outcome or result in any particular situation and no attorney client relationship exists or is established as a result of this newsletter or its receipt.
Highlighted S&H Attorney:
Melanie A. Schanker, Esq. Joins
Schanker and Hochberg P.C.
Melanie Schanker, Esq. graduated from St. John’s University School of Law in 2007 where she was editor of the Law Review. Ms. Schanker earned her B.B.A in 2004, majoring in Finance and Accounting at Emory University’s Goizuetta Business School.
Ms. Schanker is admitted to practice law in New York and New Jersey. Prior to joining Schanker & Hochberg P.C., Melanie spent six years with The Ayco Company, a subsidiary of Goldman Sachs, where she delivered comprehensive wealth management for high net worth individuals and Fortune 500 executives, guiding clients in areas including investment allocation, tax planning, insurance needs, employee benefits and retirement planning. Melanie also regularly discussed Estate Planning issues on
behalf of her Ayco clients.
Ms. Schanker joined Schanker & Hochberg P.C. in 2013 specializing in Estate Planning, Estate Administration and Elder Law. She resides in Huntington, NY and some of her favorite pastimes are baking, yoga and traveling.
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