To fund your living trust, you need to transfer assets into your trust. You can transfer money and property into your trust by placing title to your bank account and title to your real property into the trust. You must specifically identify the property and accounts within your trust.

In addition to properly funding your living trust, you need to appoint an individual or trust company to oversee and administer your living trust. The New York Estates, Powers and Trusts Law governs the administrative duties of trustees. Specifically, Article 7 of the New York Estates, Powers and Trusts Law sets forth the specific rules governing trusts. Part 2 of Article 7 establishes the specific duties and rules governing trustees.

Although there may be public confusion whether living trusts are contestable, they are. An attorney can minimize the opportunities for trust contests, but it is impossible and illegal to place a blanket provision in your trust prohibiting future contests. You should avoid sales pitches by trust companies attempting to sell you their trust services if they falsely promise to make them “fool-proof.” If you purchased a service from these companies, make sure you talk to your attorney about the living trust document they sold you before returning them.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

There are many different reasons you may want to create a living trust, and your attorney may decide to supplement your will with a living trust. However, in most cases, a living trust does not replace the need for a will. Your attorney may decide that creating a living trust is essential to your overall estate planning needs.

A living trust does not have to go through probate, and your living trust is not a part of public record, as your will is. A living trust may be a good idea to help you address setting aside enough money for a child or incapacitated adult who is unable to take care of her own finances. You can give your trustee specific instructions for distributing money to a guardian to address those special concerns.

Your attorney may decide that a living trust is unnecessary to meet your estate planning goals because other instruments, such as payable on death accounts, may address them. After discussing your needs with your estate planning attorney, your attorney can discuss the benefits with you. You can contact our office today to discuss whether a living trust is appropriate for your individual estate planning needs. If you contact our office we can help you determine the costs and benefits of creating a living trust as part of your estate planning documents.

Check in with us tomorrow to read Part 3 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

A living trust allows the person creating the trust to set aside money or property within the trust for the benefit of others by appointing a trustee to administer the trust and ensure the trust property is distributed to the beneficiaries. If you are the person creating a living trust, you are known as the grantor, owner or settlor of the living trust. A living trust is also known as a revocable inter vivos trust.

A testamentary trust, on the other hand, becomes operative after your death, pursuant to your will. Testamentary trusts typically go through probate. A living trust earns its name from the fact that you as the grantor of the trust created it while you were alive and it becomes effective before your death. After your death, your living trust may continue to operate as long as you comply with the New York Estates, Trusts and Powers Law when creating one.

Your attorney may also decide to create a “pour-over” will that allows any other property to pour-over into your trust after your death. However, the property that may pour-over from your will into your living trust will still have to go through probate. It typically becomes public record as soon as your personal representative or trustee submits it for probate. In this case, your living trust and your will become part of the New York Surrogate Court’s public records accessible by public request.

Check in with us tomorrow to read Part 2 of An Insider’s Guide to Living Trusts in New York.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

You should now understand how you can make lifetime gifts to reduce the tax liabilities on your estate. However, you can further reduce your income tax liabilities by understanding the federal tax code. The Internal Revenue Service (IRS) typically considers all gifts as taxable unless they come within the annual gift limits. The IRS does not consider some gifts as taxable. This means that some types of gifts will never trigger income taxes, regardless of the exclusionary rule. Paying an individual’s medical expenses or tuition, gifts to political organizations and spousal gifts are not taxable. Furthermore, gifts to qualified charities are even deductible in addition to being non-taxable! This may be a good year to find a charity that you would like to help by making a cash gift or property donation to serve your estate planning needs.

If you make a cash gift, it’s easy to find the value of your gift for computing your federal income tax liabilities. In other words, a cash gift of $13,000 is worth $13,000. However, for other gifts, you will need to include copies of appraisals or any other formal documents with your federal income tax returns. The IRS typically uses a fair market value approach to establish the value of your gift. You may need a formal appraisal conducted by a professional accountant or valuation company to help you establish the fair market value of property.

In closing, you now understand that making a lifetime gift can reduce your estate taxes by reducing the assets within your gross estate.

This blog is part 3 of 3 on how Federal Gift Taxes cab reduce an estate’s tax liability.  If you’ve missed parts 1 and 2, check out our blog.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

After reading the first part of this three-part series, you now have a basic understanding of why a lifetime gift may reduce an estate’s federal income tax liabilities. Now, I will cover how you can further reduce your estate’s tax liabilities. The Internal Revenue Service (IRS) gives each donor (gift giver) a tax exemption of $13,000 annually for a lifetime gift made to each donee (gift recipient). However, the IRS allows spouses to make gifts together and add their exclusions together. In other words, if you are married, you and your spouse can make an annual gift of up to $26,000 to each donee by combining your annual gift exclusion. Thus, if you have three children, you and your spouse can give each of your children up to $26,000 without triggering federal gift taxes for gifts made on or after Jan. 1, 2009. You can see how this will have the effect of reducing your income tax liabilities imposed on your estate after you die. Furthermore, your children may benefit more from a current gift than they would a future gift.

According to the IRS, donors are typically responsible for paying federal gift taxes. Thus, if you gave someone a gift that exceeded the amount of the annual gift tax exclusion, the person receiving the gift is not responsible for paying the income taxes on the value of his gift. Instead, you are responsible for paying the income taxes absent a special written agreement between you and the recipient.

This blog is part 2 of 3 on how Federal Gift Taxes cab reduce an estate’s tax liability.  Tune in to our blog tomorrow to read Part 3.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Federal gift tax laws play an integral role in reducing an estate’s income tax liabilities. As a taxpayer, making lifetime gifts can reduce your estate’s gross tax liabilities since these gifts are not included as part of your gross estate at your death in most cases. According to the federal Internal Revenue Code, a gift is one in which real or personal property, cash or any other type of property is given away without consideration or payment in return. A lifetime gift is one in which you retain no other control and is complete at the time of your death.

Each taxpayer is able to exclude up to $13,000 in annual gift taxes. This means that neither the gift recipient nor the gift donor pays federal income taxes for gifts of up to $13,000. The annual gift exclusion applies to gifts of up to $13,000 made to each done. This means that if you have three children, you can give each child a cash or property gift of up to $13,000 per year without paying federal income taxes. As you can see, making a lifetime gift may make sense since it will reduce your federal estate taxes, which is important in estate planning. Your beneficiaries will not have to pay federal income taxes on property given away while you were alive. By giving your children money now, you can help them save money on estate income taxes after your death.

This blog is part 1 of 3 on how Federal Gift Taxes cab reduce an estate’s tax liability.  Tune in to our blog tomorrow to read Part 2.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

If you or your family member is an honorable veteran, part of your estate planning considerations include discussing your VA benefits with our office.

Families of service members who died after Sept. 30, 2011, can receive up to $700 for their burial expenses. However, the $700 maximum is limited to families of certain hospitalized service members who died during their hospital admissions. If the VA did not admit their service member relatives, family members may receive up to $300 toward their funeral expenses. To qualify for a burial allowance, you must submit an Application for Burial Benefits or VA Form 21-530 and attach a copy of the service member’s death certificate and military discharge, if applicable. You must also provide proof of your expenses with receipts or bank statements, provide proof of honorable discharge if applicable and prove you did not receive other burial subsidies from other agencies or sources. You must also be able to provide proof that a service member died during military service, while in a VA hospital, in a nursing home approved by the VA, or that the veteran had retired.

The VA also allows eligible veterans to live in Armed Forces Retirement Homes. Located in Washington, D.C. and Gulfport, Mississippi, Armed Forces Retirement Homes can help some veterans receive free or reduced care nursing home services if they meet the eligibility requirements established by the VA. The VA allows veterans to live in these facilities if they can show they were enlisted in active duty for at least half time, were warrant or limited duty officers or have met one of the other eligibility requirements.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

In the last blog, we covered the history of the United States Department of Veterans Affairs (VA) and the types of benefits it administers to veterans and their families. A historical overview may help you understand your military estate planning needs.

In addition to providing pension, health care, indemnity benefits and survivorship benefits, the administration provides other types of benefits. The VA provides burial benefits, including giving certain family members a burial allowance and the privileges and rights to bury their loved ones in national cemeteries. Because of the extensive benefits the VA provides surviving family members and spouses of veterans who served our country and in doing so, gave up their lives, veterans and active service members should understand their rights to these benefits as part of their overall estate planning.

The VA distinguishes between service-related deaths and non-service-related deaths when determining the amount of the burial subsidy allowance to eligible families. For families of service members who died in-service or after sustaining a service-related injury, the VA’s burial allowance gives eligible family members up to $2,000 each to pay for their burial expenses for deaths that occurred on Sept. 11, 2001 or after that date. For deaths that occurred before Sept. 11, 2001, the VA’s burial allowance is limited to $1,500 for each service member. Additionally, the VA pays a portion or may pay for all transportation costs incurred by family members who buried their service members in a national cemetery. There are 131 national VA cemeteries. For non-service-related deaths, the VA caps its burial allowance at $700.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

During an initial consultation with our office, we may discuss your estate planning needs as an honorable veteran and the VA’s role. The United States Department of Veterans Affairs (VA) can trace its history back to the Colonial Era. In 1776, the Continental Congress began providing military benefits to soldiers to encourage them to enlist during the Revolutionary War. Congress officially established the VA in 1930. Since its early years, the VA provided pension, disability and health care benefits to eligible veterans. It began providing benefits to surviving spouses of veterans, including pension, survivors’ benefits and health care benefits.

Proper estate planning for military families includes discussing VA benefits. Military service members can also help their families receive up to $100,000 in next of kin survivor benefits if they died while performing active duty or within 120 days of separation due to a wartime injury or service-related illness. The VA provides some family members of service members killed during active duty for training or caused by a service-related injury a dependency and indemnity compensation allowance. The dependency indemnity compensation allowance provides family members and surviving spouses with a monthly basic payment allowance and additional aid for special circumstances.

You may contact our office to discuss the rights that your survivors have to your benefits if you died during active service or after performing service and while a civilian.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Your witnesses must sign your will and include their names and addresses in front of one another and in your presence. Your signature and the signatures of your witnesses will follow the end of your will. Your witnesses are important and will help authenticate or validate your will, if necessary. Your witnesses must be able to testify that you were of “sound mind and memory” to create a binding contract or will. This requires that your witnesses can testify that you understood the implications of creating a will, you knew what your estate included and you knew the “natural objects of your bound” or your relatives.

Typically, when someone files your will, that person must provide the court with a Petition or Affidavit of Subscribing Witnesses. The New York Surrogate’s Court Procedure Act also requires a petitioner filing a will to admit into probate to take other legal steps notifying your heirs and creditors of your death. The Petition or Affidavit of Subscribing Witnesses is a document that provides the Surrogate’s Court with proof that the decedent’s witnesses actually witnessed the signing of the decedent’s signature and that the decedent had the legal capacity to create a binding will. Note that you can contact us to help you create a self-proving will. By creating a self-proving will, your witnesses may not have to provide the Surrogate’s Court with this document to authenticate and validate your will.

Due to the complex requirments necessary for a will to be valid, it is important to con

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.