WELCOME BACK
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.
Happy New Year!
Schanker and Hochberg P.C. wishes everyone a very happy and healthy new year. We want to thank our colleagues and clients for your continued support, referrals and patronage. We take great pride in our work and our legal representation. It is because of the many long standing relationships we have established and maintained together that Schanker and Hochberg P.C. has been able to enjoy the esteemed reputation we have earned. We hope that 2016 brings prosperity and great things. Schanker and Hochberg P.C. anticipates a strong year of growth and continued opportunities.
2016: A New Year
Now that we are in a fresh, new year it is time to make sure your Estate Planning is in order:
- Can you locate your original Estate Planning documents?
- Can your Trustee(s), Power of Attorney, Health Care Proxy, and Executor access original documents that they may need at the critical time? Do they know who your Attorney is?
- Are you up-to-date with your titling designations to avoid Probate?
- Is it time to consider additional ‘gift’ strategies to mitigate the Estate Tax?
- Have your planning decisions changed?
The documents don’t self adjust to changed fiduciary designations or changed bequests. Similarly, handwritten notes are not effective. Take advantage of our complimentary annual review service or schedule an initial consultation.
Welcome to Nicholas Stratouly, Esq.
We are pleased to welcome Nicholas Stratouly, Esq. who is joining us as an Associate Attorney after being sworn into the practice of Law in the State of New York. He brings exceptional ability, sensitivity and a keen interest in the practice of law. We know he will achieve great things. Please see his biography on the back side of this Newsletter.
Estate Taxation
2016 Federal Estate Tax Exemption:
- $5,450,000 with a 40% tax rate on amounts in excess
- Portability preserves the exemption of a deceased spouse at this rate only if properly completed Federal Estate Tax Return is prepared and filed.
2016 Annual Gift Tax Exclusion:
- $14,000 per donee (per person you gift to); $28,000 per married couple.
- These gifts do not count against your lifetime gift tax exemption ($5,450,000)
New York State Estate Tax Exclusion:
April 1, 2015 – April 1, 2016: $3,125,000
April 1, 2016 – April 1, 2017: $4,187,500
April 1, 2017 – January 1, 2019: $5,250,000
January 1, 2019:
New York Estate Tax Exclusion rate to match the Federal Estate Tax Exemption, which is projected to be $5,900,00. However, the New York State Estate Tax will remain separate from the Federal Estate Tax. You will therefore be vulnerable to both a Federal and State Estate Tax if your Estate exceeds the applicable thresholds.
New York State Estate Taxation:
On amounts in excess of the New York State Estate Tax Exclusion, New York taxes at a top rate of 16%. The Estate Tax calculation has a tax “cliff” when the Estate’s assets are valued in excess of 5% above the exclusion amount; if you “jump off the cliff,” 100% of the Estate is taxable from dollar one! If you are within the 5% limit, the New York State Estate Tax is only applied to the amount the Estate exceeds the threshold.
New York’s Limited Gift Tax:
For gifts made between April 1, 2014 and January 1, 2019, the value of such gift will be “clawed back” into the taxable Estate for Estate Tax purposes should you die within three (3) years of making the gift.
New York does NOT offer portability of the Estate Tax Exclusion.
This means that the only way to double the Estate Tax Exclusion between spouses is to have specific provisions in your Wills/Revocable Living Trusts.
2016 New Jersey Estate Tax Exemption:
$675,000 per person with a top tax rate of 16%
- There is an inheritance tax imposed on beneficiaries other than a surviving spouse and lineal descendants (children and grandchildren) of 15% of their inheritance.
- New Jersey also does NOT offer portability of the Estate Tax Exemption.
It is imperative to review your Estate Tax Planning if you are vulnerable to either the State or Federal Estate Tax. Please call our office for your complimentary annual review meeting or to schedule an initial consultation.
Life Insurance is subject to Estate Taxation if you are the Owner. It is imperative to consider this as part of your Estate Tax evaluation because it is quite simple to remove the value of life insurance from the taxable Estate. Furthermore, life insurance, disability, and long term care insurance policies are not carved in stone. It is very important to have them reviewed to ensure they are still performing optimally and providing adequate coverage. It’s the beginning of a new year so you should be checking in with your trusted advisors to make sure that all of your planning is organized and optimal.
The Not-So-Bon Voyage
As winter and spring vacation season approaches, many of us will visit extended family and friends or enjoy some relaxation in a new, exotic place. Despite all of the glories of travel, going to new places begs the grim question: In the unfortunate event that something grave happens to you while on vacation, will your health care directives be honored?
Fortunately for those of us who remain within the United States, the laws governing health care directives (“living wills”) are fairly uniform, at least in 26 states and the District of Columbia. These 27 jurisdictions have “full reciprocity”, meaning that a health care directive validly executed elsewhere is valid within that jurisdiction.
Despite that uniformity, 24 states do not have streamlined reciprocity. Thus, despite the fact that you may have a Health Care Decisions Declaration in New York, that document may not be valid in another state. Five of the 24 states require the health care directive be executed in conformance with their laws (as opposed to the laws of the state of execution), so-called “inward reciprocity”. Twelve of the 24 states grant limited reciprocity, adding more confusion to the mix. The remaining 7 states have either no explicit provisions for reciprocity or no explicit statutory authority allowing health care directives. Thus, in these states, a health care directive may be totally ignored!
The situation is even more dire for international travelers; most Western countries will recognize foreign health care directives under the doctrine of “comity” (respect for another country’s laws), but that determination is made on a case-by-case basis, certainly not what you would desire if you were in an unconscious state and a decision about your continued care needed to be made immediately!
Despite the patchwork of laws, good foresight can help avoid a potentially traumatic situation for you and your family in the event that you are seriously injured while travelling in another jurisdiction. If you spend regular, recurring, or otherwise significant time in another jurisdiction, contact Schanker and Hochberg to discuss additional planning that can be done to ensure your health care directives are honored no matter where you may be.
| Reciprocity | Jurisdiction |
| Full | AR, CA, DC, DE, FL, GA, HI, IL, LA, ME, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OR, OH, RI, SD, TN, WV, UT, VT |
| Inward | AK, ID, MN, MS, SC |
| Limited | AL, AZ, CO, CT, IA, MD, OK, PA, TX, VA, WI, WA |
| Unclear* | IN, KS, KY, MA, MI, MO, WY |
*Indeed, neither MA nor MI have any explicit authorization for advanced health care directives.
Co-Op Ownership and Probate, ‘Oh-My’
One of the primary goals in effective Estate Planning is the avoidance of Probate in the Surrogate’s Court at time of death. Assets owned in an individual’s name or as “tenants in common” will require Letters Testamentary to be issued to the Estate’s Executor. This is only achieved by way of a Probate proceeding. Probate is avoided when assets are titled in Trust, titled “joint with rights of survivorship”, or have designated beneficiaries on the record.
In real estate, there is a legal presumption that if spouses are listed on the Deed, automatic “rights of survivorship” apply, and upon the first death, title will pass by operation of law to the surviving spouse. No Probate would be required. Co-Ops, however, are not considered real estate. They are technically stock ownership in a Corporation and the rule for Co-Ops purchased until 1996 (in New York State) is that, unless the stock certificate specifically says “with rights of survivorship”, a Probate Proceeding would be required before that specific 50% share of the Co-Op is transferred to anyone.
After 1996, the presumption of ownership is “joint with rights of survivorship” when two spouses are named on the stock certificate, even without the designation on the face of the certificate.
If you purchased your Co-Op prior to 1996, you may wish to consider having the stock certificate re-issued to designate “rights of survivorship” or to re-issue ownership to your Revocable Living Trusts. The issue gets even more complicated if you also do not have Wills. Please recall that if you are married with children, $50,000 plus one-half of your assets will automatically pass to surviving spouse and the remaining one-half to the surviving children. This is New York’s intestacy rule under the Estates, Powers and Trusts Law.
Please contact us or schedule a consultation to discuss this further should your own a Co-Op purchased prior to 1996 in New York State.
Schedule a complimentary appointment to review existing Estate Planning documents in our Long Island Office, our NEW Manhattan Office at the Empire State Building at 350 Fifth Avenue, Suite 3130, or our New Jersey office.
Contact us at either (631) 424-5400 or (212)564-3307. Please see our website at www.schankerandsch.wpengine.com for our locations and directions.
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
I Have an Estate Plan; Now What? Top Tips to Maintain Your Planning
- Make sure someone other than yourself (and your significant other) know who to contact first. For example, most of our clients keep their original, signed Wills in our Will safes. If Probate is necessary, the original Will must be produced. A copy of a signed Will is not sufficient. The Executor and/or Trustee should know who your Estate Planning Attorney is and where to find your original Will.
- Keep a “critical information” list. It should include the name and contact information for your Estate Planning Attorney, your Accountant, your Financial Advisor, your Life Insurance Advisor, and a list of where your accounts are. It should also include whether you have a safe deposit box and especially information about any accounts you manage online. Who should be contacted if there is art, antiques, and collectibles to sell? Please see www.schankerandsch.wpengine.com for our critical information worksheet. You may wish to keep a copy of the completed worksheet with your Estate Planning binder as well as with your client file at your Estate Planning Attorney’s office.
- Schedule a Family Meeting. Sit down with your Estate Planning Attorney, your family, and those people who you have appointed as Fiduciaries and discuss what responsibilities each person may have when it comes time to act, whether it be as a Trustee, Executor, Attorney-in-Fact, Health Care Agent, or Guardian.
- Review your Estate Plan regularly. Schanker and Hochberg P.C. offers complimentary annual review meetings for our clients so that the documents may be reviewed to ensure that your decisions are current.
- Consider writing a ‘Letter of Intent’ to be kept with your original Will. This can be a letter to your loved ones directing where you wish specific personal items (jewelry, art, specific household items and memorabilia) to go.
- Have a discussion with the person(s) you name as Trustee of any Trusts you establish. Trustees often have certain discretion under the terms of the Trust to invade the principal for the benefit of beneficiaries and also to withhold distributions from beneficiaries. Having a discussion with your named Trustees will enable him/her to understand how you wish that discretion be applied.
- Have a discussion with your Health Care Agent so that person understands your medical preferences. This person should also know who your primary care physician is and how to contact him/her.
Happy New Year !
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.
© Copyright 2016, SCHANKER AND HOCHBERG, P.C. All rights reserved. All materials, content and forms contained in this newsletter are the intellectual property of SCHANKER AND HOCHBERG, P.C. and may not be copied, reproduced, distributed or displayed without SCHANKER AND HOCHBERG, P.C.’s express written permission.
Highlighted S&H Attorney:
Nicholas Stratouly, Esq. (Associate)
Nicholas Stratouly, Esq. received his Bachelor of Arts from Boston College, and his Juris Doctor from St. John’s University School of Law, having graduated cum laude from Boston College and Dean’s List from St. John’s. He is admitted to practice before the Courts of the State of New York. He is a member of the New York State Bar Association, the Nassau County Bar Association, the LGBT Bar Association of Greater New York, the Young Professionals group of the Huntington Chamber of Commerce, and the Huntington Lawyers’ Club.
While at St. John’s, Mr. Stratouly was Executive Notes and Comments Editor for the Journal of Civil Rights and Economic Development. His works have been published online, both on the Journal’s website (“The Employment Language Fairness Act: A Law Today That Can Bring Progress Tomorrow”) and THE JURIST, an online legal forum (“The Fifty-Year Tune Up: Two Words, A Historic Change”). His larger thesis is forthcoming in the print version of
the Journal.
Mr. Stratouly’s strong writing abilities, organizational prowess, and attention to detail allow him to provide his clients with an exceptional and thorough estate planning experience.
Mr. Stratouly resides in Old Brookville with his fiancé, Justin, a law student at St. John’s.
nick@schankerandsch.wpengine.com