Do you have questions about estate planning in Buffalo? Check out these 3 estate planning tips, then give our lawyers a call to get started.
1. Does the Size of an Estate Matter?
- Estates with assets of less than $30,000 and no real estate can be handled via a voluntary administration – a very short form estate – using a four-page form that lists everyone involved in the estate.
- Sans a valid will, the form lists distributees; however, if there is a will, it lists beneficiaries. It also names the person petitioning for the letters and lists the specific assets to be administered.
- A small estate grants specific authority to handle certain assets, such as bank accounts and vehicles, and the court issues certificates permitting the petitioner to collect those assets, but this method does not apply to real property.
- This process is much more efficient, and the filing fees are minimal – perhaps only a dollar – and it offers a very simple procedure to close up a loved one’s affairs.
2. Strategies for Reducing Estate Taxes
- Although estate taxes are not a big issue for most people, various techniques can be implemented, such as gifting property.
- For federal purposes, gift taxes and estate taxes are intertwined to the extent that they reduce your available credit for gifts. You can’t use it for estate taxes, but gifting before death enables you to reduce your federal estate tax.
- If you own highly appreciated stock, you might prefer to retain it because you get a step-up in basis for your assets.
- One very simple and easy technique is to give away a permissible amount every year without affecting your estate tax credits. You can give away a certain amount of money per person, per year, without filing gift tax returns or affecting estate tax credits.
- Keep aware of where you are in life. If you’re 87 years old and well below estate tax limits, don’t worry about it; on the other hand, if you’re getting close, you may elect to take advantage of some of these.
3. Estate Has Insufficient Assets to Cover the Debt
- When spouses of deceased individuals tell us that their husband or loved one left numerous debts and very few assets, we share the rules regarding payment of debts from estates.
- When an individual dies, the estate is liable for that person’s debts. No individual, executor, or spouse is personally liable for those debts.
- When addressing such a case, we must first learn what is in his estate. Often, there is nothing in his estate because the real estate is jointly owned with the spouse, IRAs are going directly to the spouse, and their bank accounts are joint.
- If a husband dies leaving $50,000 of assets and $100,000 of debts, creditors are entitled to those assets – but only what’s there. Under a deficit estate, each creditor gets a pro rata share, and that’s all they get.
- Even in cases with significant creditors, certain property is considered family exempt property. The spouse is entitled to $25,000 of cash or cash-type assets based on the theory that she must not be left poverty-stricken. A spouse is also entitled to a car valued under $25,000, furniture, and various personal items.
Are you planning your estate and have questions about our 3 estate planning tips? If you still have estate planning questions, contact our dedicated Buffalo estate planning attorneys to schedule a confidential consultation. We welcome the opportunity to serve you and handle all of your estate planning needs. The law firm of Cole, Sorrentino, Hurley, Hewner & Gambino has been providing sound legal advice and representation in wills, trusts, and estate planning matters for more than 45 years.
Let our experience work for you.
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