Millennials and Estate Planning

Millennials and estate planning might not sound like two terms that can go together. However, many members of this generation understand the importance of planning for the future. In the past, younger individuals did not put much thought into their wills and estate plans. Today, millennials are creating a plan to protect their loved ones and assets. If you are a millennial and want to learn more about an estate plan, schedule a consultation with Jennifer V. Abelaj Law Firm by calling 212-328-9568.

What Is Estate Planning?

According to the American Bar Association, estate planning covers the legal and financial matters that relate to the handling of assets and care in the event of a disability or death. Over the past years, millennials and estate planning has become a hot topic. While some individuals in this generation have taken their estate plans seriously, many still do not have a plan in place. An estate plan is much more than a Last Will and Testament (Will). Estate planning does not require having great wealth or a large estate. Anyone with any type of assets, even a small bank account, should consider creating an estate plan.  An estate plan ensures that all your wishes are met in the event of your death or incapacity. When it comes time to create an estate plan for you, schedule a consultation with the experienced estate planning attorneys at Jennifer V. Abelaj Law Firm.

Millennials Need an Estate Plan

According to the United States Government Accountability Office, millennials have less assets than previous generations, however, they still need to think about estate planning. Here are a few points to take into consideration.

Designates Beneficiaries

While many younger millennials might not have a lot of money, most have a bank account. Those who have been in the workforce for a few years could have a 401k retirement plan and/or a life insurance policy. When that person passes away, who will inherit all those assets? With an estate plan, the beneficiaries are clearly designated. Unfortunately, some people die without a will, trust, or an estate plan. In that case, the assets may have to be divided between the living relatives, leading to lengthy court proceedings. Having relatives fight for assets is the last thing anyone wants to happen after they die. 

Medical Power of Attorney

What happens if you become incapacitated or seriously ill? With a medical power of attorney, a designated party can make medical decisions according to your wishes in the estate plan. If a person cannot communicate or make decisions, a power of attorney gives the designated person the right to make any health decisions, including withdrawing life-sustaining medical care. Along with a power of attorney, an estate plan will often include all the burial arrangements and specifies whether the individual wants to donate their organs. Many millennials do not realize that these documents are very important, especially if someone wants to have unique end-of-life wishes. This part of the estate plan allows an individual to appoint someone to act on their behalf regarding any financial or medical decisions. 

Durable Power of Attorney

Power of attorney is centered around more than just medical decisions. If a person becomes incapacitated or seriously ill, then that same person can also make decisions about other affairs in the person’s life, such as paying bills or caring for pets. With a durable power of attorney document, an individual can choose someone to handle depositing checks, dealing with health insurance, or paying rent. The durable power of attorney will remain in effect until the individual withdraws it. Without a durable power of attorney document, then the issue is handled by the probate court. In those cases, a judge will appoint someone to take care of those duties. Creating a comprehensive estate plan provides peace of mind and ensures that all major decisions will be handled by a person you trust. 

Guardianship for Children and Pets

Unfortunately, parents can pass away, leaving custody issues in doubt. The other parent will often raise the children, but there are times when that person is not capable or unwilling to take on the responsibilities. In that case, millennials will want to specify someone to be a guardian to the children. These issues are crucial because if no guardians are appointed, the courts designate someone to care for the children. Choosing a person to provide for your children should not be taken lightly. This individual should have a bond with the kids and be willing to take on this difficult task. Also, only name someone as a guardian after discussing it with them first. Sometimes, people may not want to take on the responsibility of being a “parent” for someone else’s children. 

Many millennials also have pets. Usually, when a person passes away, a friend or relative will take the pets. There have been horror stories about beloved pets being left at shelters with no place to live. For anyone who loves their pets, outlining end-of-life arrangements for them is essential. Like child custody, these arrangements will allow you to choose someone who will uphold your wishes and give your pet a great home in the event of your death. 

Let a New York Estate Planning Attorney Help with Your Estate Plan

Millennials and estate planning might not seem like an expected combination, but most members of this generation realize the importance of these documents. Millennials need to think about what could help in the future with their assets, children, and pets. An estate planning attorney can help ensure the proper distribution of assets while protecting your wishes if you become ill or pass away. If you want to set up a trust, will, or need other estate planning assistance, contact the Jennifer V. Abelaj Law Firm at 212-328-9568.

The Steps To Take For Effective Intergenerational Wealth

There is a lot more to effective intergenerational wealth planning than estate planning. However, estate planning is an essential component. Intergenerational wealth planning means taking the critical steps to plan for preserving, using, and transferring your wealth to future generations. Estate planning involves a sound and up-to-date will and often requires working with an attorney and financial advisor. Both include preparing and planning to ensure you remain financially independent while distributing your assets according to your preferred time frame and structure. Family and legacy are innate portions of effective intergenerational wealth and estate planning, and there are critical steps to take to preserve your family’s foundation and wealth throughout generations. If you would like to learn more about intergenerational wealth with estate planning, call the Jennifer V. Abelaj Law Firm at 212-328-9568. An experienced estate planning attorney could help protect your legacy and future generations. 

Effective Intergenerational Wealth Planning 

Effective intergenerational wealth planning requires getting together with the family and agreeing to discuss the future of the family’s assets, including real estate, tangible and intangible assets, and businesses. A successful and smooth transition requires open conversation and careful planning and preparation. The planning means minimizing the impact of inheritance tax when it passes to heirs and keeping them from dealing with stress from years of costly probate. Intergenerational wealth planning and management allow the estate owners to control where the money goes after they are gone. It is satisfying for many to get a clear picture of how their wealth will positively impact future generations to come. Passing on wealth to heirs also means handling the process as tax-efficiently as possible. 

The Benefits of Estate Planning 

Estate planning involves carefully structuring an estate to save family members from the unnecessary financial and emotional strain of probate in the future. People often mistakenly believe that estate planning is something that wealthy families do and not something they should waste their time and worry considering. However, there are many things that everyone can benefit from, and every legal adult should begin to prepare and plan. An estate plan ensures a strategic plan for the estate holder’s future healthcare, home, and finances. Individuals can provide for their families and future generations by organizing and estate planning, even when they are gone. Other benefits of estate planning include: 

• Estate planning allows the holder of the estate to distribute assets to family members according to their wishes and the time frame they desire 
• Allows the individual to talk to their family members about opportunities and various options involving finances and assets 
• Estate planning means discussing the advantages and disadvantages of lifetime gifting or leaving family members an inheritance
• They can evaluate whether they would like to set up trusts for heirs 
• Planning means determining how the heritage priorities will impact their family’s future generations
• Organizing and estate planning reduces estate taxes 

Effective generational wealth with estate planning is all the valuable assets a person passes down to their heirs. Arranging the smooth and seamless transfer of wealth is critical in preserving the family’s legacy, ensuring heirs inherit the assets to intend to receive, and minimizing taxes.

The Steps to Take for Effective Intergenerational Wealth and Estate Planning 

It is not uncommon for families to plan to transfer wealth without considering how vital passing on the family legacy is to them. That is especially true concerning details about passing on their philanthropic, social, and economic values. Building a fierce legacy is admirable, making it essential to pass on to future generations. Careful planning and preparation will play a pivotal role in effectively facilitating these considerations in transferring family wealth and estate planning. The first and most vital step for estate planning is determining net worth. They can do this by adding all tangible and intangible assets and then subtracting all liabilities and debt. 

The Tangible Assets 

• Home, real estate, and property 
• Vehicles 
• Collectables 

The Intangible Assets  

Intangible assets are not physical and include: 

• Checking and savings accounts 
• Life insurance policies 
• Stocks and bonds 
• Retirement accounts, including 401k

You have the knowledge and experience to build wealth successfully, and you can pass that knowledge down to your heirs and future generations. It is vital to plan effectively, create a solid estate plan, and review it regularly to make updates. After taking stock of all assets and subtracting liabilities, meet with the family to discuss their desires and needs. Finally, establish the beneficiaries and directives. A seasoned attorney at Jennifer V. Abelaj Law Firm can go over the steps and benefits of addressing intergenerational wealth with estate planning. 

The Common Concerns of Estate Planning  

While there are numerous benefits to intergenerational wealth and estate planning, there are also common concerns to keep in mind. 

Avoiding Probate 

Probate is stressful and costly for family members after losing a loved one. There are executor fees, attorney expenses, administrative fees, and more. The costs can accumulate quickly. Making matters worse, going through probate is almost always an extensive and lengthy process.

Family Disputes 

It is not uncommon for estate planning individuals to believe that family members and heirs can work out disputes and peacefully split assets. Carefully organizing a solid plan can provide unity among the family for years to come. Trusting heirs to divide an inheritance amongst themselves can leave a family in disarray. 

Call an Experienced Estate Lawyer Today to Start Planning  

Effective planning is about taking control of your life and health and planning the passing of your wealth to future generations to ensure intergenerational wealth. The planning will allow you to make essential proactive decisions so your loved ones will not have to make them for you if that time comes. If you are ready to begin your intergenerational wealth with estate planning, call Jennifer V. Abelaj Law Firm at 212-328-9568. You can trust an experienced estate lawyer to help protect your legacy for future generations. 

Should I Start A Nonprofit?

Starting a nonprofit can be an excellent opportunity for entrepreneurs looking to open a new business while helping people and making positive changes in the world around them. Strategizing and building a successful nonprofit requires a particular set of skills. Yet, from a company owner’s perspective, the experience is not significantly different from owning any other small business. Exploring the potential benefits and risks of starting a nonprofit organization can help you decide whether it is the right choice or if starting a traditional business would be the best option. When gathering information and determining if a nonprofit organization is the right path, you must consider various aspects. The essential factors include how you plan to fundraise and fund the business, your mission, and your proposed budget. When prospective business owners are thinking about a new business venture, they commonly wonder, should I start a nonprofit? For more information, call the Jennifer V. Abelaj Law Firm at 212-328-9568 to discuss your options.

The Benefits of Starting a Nonprofit Organization

The mission of nonprofit organizations is to work towards bettering the community and citizens who live there. Opening one is excellent for credibility because it demonstrates philanthropy, trustworthiness, and a desire to do good. Opening a nonprofit can mean helping others while also accommodating a comfortable life for the organization’s leaders and their families. There are many other benefits of starting a nonprofit organization, including:

Running a Nonprofit is a Rewarding Experience

Starting a nonprofit organization allows business owners to see first-hand how the company positively affects the community. For example, opening the doors of an education nonprofit enables business owners to share knowledge, educate others, and bring positive change. 

Nonprofits are Eligible for Separate Entity Status

Nonprofit organizations are increasingly intersecting with LLCs and forming hybrid organizations. Traditional fundraising methods are the cornerstone of nonprofits. Yet, many struggle to raise sufficient funding they need to help their cause. Therefore, organizations are strategically restructuring to include for-profit ventures to raise additional financing without losing their nonprofit status and tax exemptions. When businesses structure correctly, the Internal Revenue Service allows them to operate under both statutes. A knowledgeable attorney at the Jennifer V. Abelaj Law Firm is available to answer questions and help you answer the question: Should I start a nonprofit?

Nonprofits have Limited Liability Protection (LLC)

Nonprofits have the same liability protections as other LLCs and corporations. The protection means that tax laws cannot hold organization leaders or team members personally liable for the nonprofit’s debt.

There are Many Tax-Exemptions and Deductions

The nonprofit association could qualify for tax-exempt status if the business meets specific requirements. Further, there are various other tax exemptions the federal government offers. Under the Internal Revenue Code Section 501(c)(3), the nonprofit is exempt from paying federal income taxes, and donations are tax-deductible for the donors. The requirements for this exemption include being an organization that benefits a charitable, religious, scientific, literary, or educational cause.

Nonprofit Organizations are Eligible for Public and Private Grants 

Public and private grantmakers typically fund nonprofit organizations that qualify for public charity status with the internal revenue service. Nonprofit organizations are eligible for many grants when many other businesses are not eligible to apply. Even for the grants open to for-profit and nonprofit organizations, the latter will take preference in most cases.

Incorporated Nonprofits can Offer Benefits to Employees 

When nonprofit organizations choose to incorporate, they can offer benefits to employees, including health insurance, retirement, and pensions. Nonprofit organization team members typically love their work and dedicate themselves to the cause. They realize the work will not make them wealthy but appreciate helping others and the community. Offering them the benefits means showing them gratitude and appreciation. 

A Successful Nonprofit Could Mean Leaving Behind a Lasting Legacy 

Opening a successful nonprofit business can mean that you are a successful business owner and an important person in history. A nonprofit organization can have a meaningful and lasting impact on people’s lives that they remember for years to come. 

The Disadvantages of Opening a Nonprofit

People commonly see a community’s needs and decide they would like to start a nonprofit organization. Yet, it is essential to note that creating and successfully sustaining a nonprofit business are challenging tasks. It can take years of determination to get the organization running effectively. According to the nonprofit and grant information knowledge base from Candid Learning, the cost of opening a nonprofit organization is often steep. Organizing the business takes plenty of time, money, and effort. Business owners will also need to pay fees to apply for the tax exemption and incorporation. Many also find that hiring an accountant, attorney, or other consultants is also necessary for ensuring they navigate the process correctly. Other disadvantages of starting a nonprofit include: 

• Significant paperwork and detailed record-keeping, more so than with for-profit businesses  
• Articles of incorporation and bylaws limit personal control of individual owners 
• Nonprofit organizations always face public scrutiny 

The most significant disadvantage is the funding limitations typical for nonprofit organizations. Fundraising problems can often be a nonprofit’s most considerable setback and challenge. It is not uncommon for them to find it necessary to discontinue services and support they provide to those in need when they cannot meet fundraising requirements to keep the business running successfully. Grant writer services are also expensive but crucial for obtaining the grants needed to keep the doors open. 

Call an Experienced Nonprofit Lawyer Today

Tax-exempt status and legal liability elimination sound like the right way to go when starting a new organization. However, prospective business owners must consider many crucial elements of running a nonprofit, including raising funds and attracting the right talent with competitive wages and benefits. Running a successful nonprofit organization comes with many challenges. Yet, it can be the most rewarding business venture you can experience with the proper planning and preparation. For more information on, should I start a nonprofit? Call the Jennifer V. Abelaj Law Firm at 212-328-9568. A knowledgeable nonprofit lawyer can help go over the benefits and disadvantages to help you figure out the best option for your new business.

Top 5 Excuses For Avoiding Estate Planning

It is vital to understand that every adult needs estate planning. While people make many excuses for putting it off, the cost of failing to plan can lead to many negative consequences. Many people neglect estate planning for many reasons, from being too young to worry about estate planning to not having the time. Yet, without an estate plan, you cannot protect your loved ones and beneficiaries from turmoil, conflict, and the stress of spending time in court after your death. Solid estate planning entails careful decision-making and organization, including healthcare directives, beneficiary designation, drafting and execution of legal contracts, and regular review and revisions. To avoid these popular excuses for avoiding estate planning, contact the experienced and compassionate estate planning attorney at Jennifer V. Abelaj Law Firm at 212-328-9568. 

The Top 5 Excuses People Use To Avoid Estate Planning 

There are many reasons that people avoid, delay, or fail to plan an estate altogether.

1. You Think You Are Too Young for an Estate Plan

The most common reason people avoid estate planning is believing they are too young, and that estate planning is only for the elderly. However, everyone needs to prepare for their future and what will happen after they are gone. The best time to prepare and begin estate planning is when a person becomes a legal adult. Many are familiar with the portion of estate planning that involves deciding what will happen to a person’s assets after they are deceased. Yet, an efficient estate plan also means preparing for how loved ones will handle assets if an accident or illness leads to incapacitation.  

The deterioration of mental health can impair a person’s ability to communicate desires with healthcare professionals. In other cases, an unexpected accident can leave a person without the ability to make their own financial or medical decisions. When individuals designate a person to handle tough decisions with their best interest in mind, they know they will receive the quality and type of care they wish to receive. An attorney at Jennifer V. Abelaj Law Firm could help prepare an appropriate estate plan for a younger person, and help them avoid making this specific excuse for avoiding estate planning. 

2. You Think You Do Not Have Enough Assets

A Last Will and Testament (will) may not be necessary for single young adults who do not have children or many assets. However, selecting beneficiaries for life insurance and other intangible assets is crucial. It is also wise for everyone to have a durable and medical power of attorney to designate decision-making authority in the event of an accident or event that limits mental capacity. A living will is also an important estate planning tool for selecting preferences in the case of incapacitation. Finally, establishing solid HIPAA directives will allow those you choose immediate access to private medical records. 

3. You Think Estate Planning is Too Expensive

Many are under the impression that estate planning is expensive and only for the wealthy. Contrary to that belief, a will or other legal contracts and documents are relatively inexpensive. Moreover, fewer assets often mean planning the estate will be less complex, and the expenses to plan will be much lower than those with multiple properties and wealth. 

Estate planning is not too expensive, and ultimately, it should save money in the long run through tax deductions and avoiding the high cost of probate. While there are some fees, the estate holder will need to cover, the benefits of estate planning significantly outweigh the adverse consequences. 

4. You Think Your Heirs Will Handle Everything Peacefully

Everyone likes to believe their family will peacefully handle the distribution of all assets when they are gone. Unfortunately, leaving the heirs to deal with splitting assets and probate often leads to disagreements, fighting amongst family members, and even some losing their inheritance altogether. 

Sadly, this often leads to many internal family problems. When one person ends up controlling  all assets, the money is theirs, and there is no way for other heirs to enforce how they share or spend it legally. There are also issues when the individual with total control has debt. When the assets are in one person’s name, creditors could freeze or take them to pay off outstanding balances. The sound decision is setting up the estate with explicit instructions on splitting the money between heirs and desires on how they spend it in the future. This also gives a person full authority and control in the decision-making process, and peace knowing that their wishes will be followed after their death. 

5. You Think Estate Planning Takes Too Long

Taking the time to plan and prepare now will save time for your loved ones after you pass away. A comprehensive estate plan involves simplifying the legal work now so beneficiaries do not have to in the event of an untimely injury, illness, or death. Preparing an estate plan will save them from enduring a lengthy and costly probate process while they are grieving.

Contact an Experienced Estate Planning Lawyer Today 

A diligent estate planning attorney can help you strategize and prepare an effective plan that protects your legacy and the future of your loved ones. While it is common to put estate planning off or avoid it together, every legal adult should plan and prepare for the future. Carefully planning your estate is the only way to ensure you receive the healthcare you wish to receive if you cannot make important decisions and choose what happens to your assets. For more information on the excuses for avoiding estate planning, and how to overcome them effectively, contact the Jennifer V. Abelaj Law Firm at 212-328-9568. An experienced estate planning lawyer can help answer your questions and work with you to prepare an appropriate and comprehensive estate plan. 

Estate Planning And Divorce

Estate planning is something that everyone should take the time to do. However, because it is not very pleasant to think about one’s eventual demise, most people either avoid the task altogether or create an estate plan and then try to forget about it. Unfortunately, there are certain life events that require people to update or completely rewrite their estate plans. Divorce is one of those life events. Married people typically leave most, if not all, of their estates to their spouses. However, this is likely not what they want after a divorce. Whether you are only considering divorce, divorcing, or recently divorced, it may be time to reevaluate your estate plan. If you have questions about estate planning and divorce, consider contacting a skilled New York estate planning attorney at Jennifer V. Abelaj Law Firm by calling 212-328-9568 to learn more about your options.

Estate Planning Documents To Update

When thinking about estate planning, most people immediately think of a Last Will and Testament (will). A will may be a central component of an estate plan, but there are many other documents that should also be included. When updating an estate plan due to divorce, make sure to think about your:

• Wills—People may want to change bequests, the executor, guardianship for minor children, or other details after a divorce. In many cases, it can be easier to start fresh with a new will than to try to update an existing one
• Power of attorney—Most people do not want a former spouse to have power of attorney over any part of their lives. Therefore, after divorce, a new power of attorney can be executed naming an adult child, sibling, parent, or other trusted person. There may also be more than one power of attorney, including durable, medical, and financial
• Health care proxy—Many people authorize a health care proxy to make health care decisions on their behalf if they are unable to make those decisions themselves. Married couples often authorize each other as healthcare proxies. However, most people would prefer to authorize another trusted person for that position after a divorce
• Revocable trusts—If a revocable trust is part of a person’s estate plan, he or she may want to revisit estate planning after divorce. Most people remove their former spouse, as well as any of the former spouse’s relatives, from the revocable trust
• Beneficiaries—Most estate plans include a variety of life insurance policies, retirement accounts, pensions, pay-on-death and transfer-on-death accounts, and more that have designated beneficiaries. These accounts do not pass through the will to be given to heirs but are, instead, given directly to the beneficiary named on the policy or account and should, therefore, be updated after a divorce

Most estate planning documents can be updated before the divorce is final. However, some documents may need to wait until the divorce is final unless permission from the spouse is given.

Does Divorce Invalidate a Will?

In New York, divorce does not invalidate a will. However, according to the Nassau County Bar Association, divorce or legal separation will revoke the revocable dispositions of property made to a former spouse. This includes but is not limited to dispositions in a will and designations as beneficiaries on bank accounts, life insurance policies, pensions, and/or revocable trusts. Any appointments of the former spouse, such as executor, trustee, guardian, health care agent, or attorney-in-fact, are also revoked. The key factor is that the instrument, or document, must be revocable, which means that if a person could have revoked it during life, he or she would have. When one spouse passes away, any existing documents that were revoked due to the divorce are treated as though the former spouse pre-deceased him or her. The alternate executor would be assigned the task of probating the will, and assets would transfer to the designated alternate beneficiaries.

Bequests and appointments, such as guardianship, to anyone other than the former spouse, will remain valid before, during, and after a divorce. The revocation applies only to the former spouse. Therefore, if your current estate plan leaves assets to your former spouse’s parents, children from a previous relationship, siblings, or others, you will need to update your estate plan if you wish to remove these beneficiaries.

Can a Divorced Spouse Inherit?

There is a general rule of revocation that prevents a divorced spouse from inheriting after his or her former spouse passes away. However, there are two exceptions to this general rule, including:

• A legal order to provide
• A deliberate choice to include the divorced spouse

A Legal Order To Provide

In some cases, a divorce decree or legal separation agreement will require that certain benefits be maintained for a former spouse. Any legal order that requires providing for a former spouse would supersede the law that typically prevents a divorced spouse from inheriting. If you have a legal order that requires you to provide certain benefits to a former spouse, a skilled estate planning lawyer at the Jennifer V. Abelaj Law Firm may be able to help you with estate planning and divorce questions to ensure that you comply with the order.

A Deliberate Choice To Include the Divorced Spouse

Some divorcing couples remain on friendly terms and, therefore, may choose to include their former spouses in their wills or as beneficiaries for life insurance policies, retirement accounts, or trusts after the divorce is final. In these situations, the former spouses may want to create new documents after the divorce with updated dates so that the intent to include the former spouse is clear.

What If There Is No Will?

In the event that someone passes away without a will and there is a final judgment of divorce, the divorced spouse has forfeited any rights to inherit or act as administrator of the estate. However, not having a will may complicate matters for the deceased’s heirs. Therefore, everyone should have at least a basic estate plan that includes a will.

What Happens If You Die Before the Divorce Is Final?

Once a divorce is final, any provisions in the will that specifically benefit the former spouse are voided. If one spouse dies before the divorce is made final, however, the situation is slightly different. First, before the divorce is final, one spouse cannot completely disinherit the other. According to the New York estates, powers, and trust law, a surviving spouse is given what is called an “elective share.” This is an automatic right to a certain portion of the estate. However, this “right of election” or elective share can be eliminated using a separation agreement.

Contact an Estate Planning Attorney for Help With Estate Planning and Divorce

Estate planning and divorce can be complex. Even in a situation where both spouses agree on every point, a divorce is a major change that requires many additional changes. If you and your spouse are divorcing and you are ready to update your estate plan, consider contacting a knowledgeable estate planning attorney at the Jennifer V. Abelaj Law Firm by calling 212-328-9568 to schedule a consultation and review your options for creating a new or updated estate plan after divorce.

Pets And Estate Planning

Pets have become an important part of our families today, many owners putting their love and care a top priority. Whether someone is single or has a family that includes children, pets contribute to our quality of life by providing companionship and unconditional love. They may go along on the family vacation, accompany us on a morning run, or just tuck in on the sofa while watching a favorite movie or television show. Many animal lovers who are passionate about their furry family members are curious about pets and estate planning. Is there such a thing, and what should you know? Those with questions may want to consider reaching out to the experienced estate planning attorneys at Jennifer V. Abelaj Law Firm at 212-328-9568 to learn about all of their legal options.

Pet Ownership in the United States

According to the Insurance Information Institute, Inc. (III) approximately 70% of households in the United States include pets. A survey conducted by the American Pet Products Association found that more than 90 million families owned pets during 2021. This increase is partially due to the COVID-19 pandemic when more people brought pets into their homes for companionship and comfort. Of pet owners, 69% of households had a dog, while 45% had a cat. Many pet owners assume that if something were to happen to them, a family member would take over the care of a pet. Unfortunately, many end up in shelters where they may or may not be adopted.

Why Include a Pet in Your Estate Plan?

Just as people create a Last Will and Testament or estate plan to plan for the future of their loved ones upon their passing, many want to make provisions for their dog, cat, or other pet in the event of their death. It is possible to designate who will be responsible for providing shelter, care, nourishment, and for the other needs of a pet. However, it is important to consider who would be trustworthy and responsible in carrying out your wishes. Surveys conducted in recent years indicate that millennials are significantly more interested than baby boomers in having provisions for pets in their estate plans. Ultimately, when there are no provisions outlined in a will concerning the future care of a pet, it may be considered property. This means the future of a pet may depend on a state’s intestacy laws. The simplest thing to do is designate who you want to care for a pet in a will, however there are other options such as pet trusts.

Pets and Estate Planning Options

There are a few options when it comes to providing for a pet’s future or seeking medical care for a pet in some circumstances. Some of the options include:

• Informal agreements
• Letters of instruction
• Pet trusts
• Durable power of attorney for pet care

Those with questions regarding the various estate planning options for pets may want to consider visiting with Jennifer V. Abelaj Law Firm to learn more.

Informal Agreements

Informal agreements are common and often involve a close friend or family member who is reliable and trustworthy. A person can request that if they become ill or pass, this person will care for the pet. Informal agreements are fine for their purpose, however it is important to consider that whoever is chosen to provide care can do whatever they please. For instance, someone who moves into a retirement home and places the care of their pet to a son or daughter will have no control in what happens once the pet is in their possession. Therefore, it is critical to choose someone who is highly trusted when using an informal agreement.

Letters of Instruction

A letter of instruction is not submitted to a probate court and is designed to work in unison with a will, trust, or other estate planning device. Letters of instruction are often left behind for family members, and are information, instructions, or express wishes concerning what you do and do not want. Letters of instruction are not legally enforceable and have little impact on assets or property. Many pet owners use letters of instruction to outline their wishes regarding their pets, how the pet should be cared for, who should take care of it, and more. Letters of instruction can be modified or updated at any time, which makes this option easy for many pet owners.

Pet Trusts

A pet trust makes it possible for a pet owner to name a caretaker that will provide for a pet in the event the owner becomes incapacitated or passes. The designated caretaker is under a fiduciary obligation to care for the pet as outlined in the trust. Pet trusts typically provide funds that will be used to take care of the pet which are disbursed to the appointed caretaker by the trustee. These funds are used for food, veterinary care, and other costs.

Pet trusts also make it possible to designate successive caretakers should the primary caretaker have a change in life circumstances or another event that makes it impossible for them to continue caring for the pet. A pet trust ensures that a pet does not become the legal property of someone who is not trustworthy or responsible, or someone of your choosing. With a pet trust it is possible to maintain control over caregivers. This gives the most peace of mind to many pet owners who want to ensure their pets are in good hands. 

Durable Power of Attorney for Pet Care

Some pet owners want someone who can act on their behalf when their pet needs medical care and they are on vacation or away on business. A durable power of attorney for pet care authorizes another person to seek medical care for a pet and specifies the extent to which the agent may act on the pet owner’s behalf.

Consider Visiting with an Experienced Estate Planning Attorney Today 

Pets and estate planning are more common than ever before today. Each year more than 500,000 pets are euthanized because their owners could no longer care for them according to the American Bar Association. While humans have many others they can rely on for their needs, pets have only their owners. They rely on their “humans” for food, shelter, love, and care. Those with dogs, cats, or other pets who are considering planning for their pets’ futures may want to consider visiting with Jennifer V. Abelaj Law Firm today at 212-328-9568.

Inherited Property: What is Step Up in Basis? Discussion with Cherie Williams, CPA of The Little CPA

Jennifer collaborated with Cherie Williams, CPA, founder of The Little CPA, on the topic of inheriting assets. Cherie created The Little CPA to empower purpose-driven professionals to make wise financial decisions that build diligent wealth.

Inherited Property: What is Step-Up in Basis? – The Little CPA

(The Little CPA empowers purpose-driven professionals to make wise financial decisions that build diligent wealth.)

Creating A Business Succession Plan

Starting and building a business is a work of a lifetime that requires making unsaid compromises and facing unknown hardships. Yet, when it comes to planning a future for their businesses, most business owners do not have a legal plan in place. The United States Small Business Administration reports that around 70 percent of privately owned businesses, with an estimated worth of $70 trillion, will change hands in the next 10–15 years. Yet, as reported by the National Association of Corporate Directors, only one in four private companies opt to have a formal succession plan in place. If you want to know more about creating a business succession plan for your business and about the legal process involved, consider contacting the experienced New York estate planning attorneys of Jennifer V. Abelaj Law Firm today by calling 212-328-9568.

What Is Business Succession Planning?

In simple words, business succession planning means preparing in advance for a change in the ownership of the business. This involves identifying the events that may cause the ownership change, establishing certain timelines and standard operating procedures, and identifying potential successors or key employees.

Unforeseen and unfortunate events, such as a family feud, death, severe illness, or disability, may require a sudden change in business ownership and management. Having a proper succession plan for a business is like having a will for a person. When a person prepares a will, that person decides what will happen to his or her wealth and property after he or she dies. Similarly, having a business succession plan in place ensures that the business has an exit or a transfer per the owner’s wishes.

Benefits of Having a Business Succession Plan

Creating a succession plan for one’s business has many benefits. Some of these benefits include:

• Smoothing the transition
• Maximizing value and minimizing loss
• Training future leaders or employees
• Identifying weaknesses
• Retaining key employees or creating roles

Smoothing the Transition

If the business is to be transferred to a family member, a succession plan enables a smooth and clear transition and avoids a potential family feud. Rather than leaving it to the court to decide what happens to the business, the decision is made by the business owner in advance when a plan is in place.

Maximizing Value and Minimizing Loss

If the business is to be sold or transferred to a third party, a pre-determined plan about how that transition will be handled helps to maximize the value of the business. Having a succession plan in place also helps to avoid a last minute or sudden sale below the market or fair value.

Training Future Leaders or Employees

Whether the business is to be transferred among family members or to a key employee, identifying the potential successor or successors allows time for sufficient training.

Identifying Weaknesses

While planning in advance, the owner may identify loopholes or inefficiencies in the business and will be able to make a plan to address those weaknesses.

Retaining Key Employees or Creating Roles

Certain employees are important to the success of the business. Further, a business owner may want to involve certain family members in the business. With succession planning, the business owner has the opportunity to retain those employees and create roles as needed for family members.

If you have been thinking about creating a business succession plan but are not sure about the best options for your business, a skilled estate planning attorney at Jennifer V. Abelaj Law Firm can help you better understand the steps involved in creating a sound business succession plan.

Steps To Create a Business Succession Plan

Creating a business succession plan involves considering multiple factors. Some of the most important steps involved in creating a business plan include the following:

• Identifying future goals
• Identifying potential successors
• Conducting a business valuation
• Completing estate and tax planning
• Making necessary changes to governing documents
• Selecting an exit option
• Selecting a team of professionals

Identifying Future Goals

While creating a business succession plan, the business owner needs to identify personal goals are and desires for the business. This includes retirement planning and, if the business is a family business, choosing whether to transfer the business to family members or opt for an exit strategy.

Identifying Potential Successors

A business owner must initiate an honest conversation with family members and identify who is most capable of running the business. Additionally, determine whether the family member is actually interested in running the family business in the future. Sometimes, however, a key employee may be best suited to run the business through an Employee Stock Ownership Plan. If there are no potential candidates, the business owner may consider selling the business.

Conducting a Business Valuation

Conducting a business valuation through an appraiser is important to the process of creating an appropriate business succession plan. A business valuation is done on the basis of revenues, potential incomes, debt, assets, pending litigation, and current market value.

Completing Estate and Tax Planning

Estate and tax planning is one of the most important steps in a business succession plan. Failing to plan these well can lead to unnecessary expenses. However, proper planning can minimize taxes.

Making Necessary Changes to Governing Documents

Making corresponding changes in the organization’s governing documents will ensure that those documents align with the succession plan. Any contrary terms or clauses in the company’s partnership agreement or shareholder agreement may later create a hurdle if not changed accordingly.

Selecting an Exit Option

Typically, business owners select one of four modes of exiting their own business:

• Transferring to a family member
• Making a sale deal with a key employee or a business partner
• Selling the company to a third party
• Closing and liquidating the company

Selecting a Team of Professionals

A good business succession plan addresses the multiple factors that impact the value and longevity of the business. Therefore, it is important to select a team that can handle the many aspects of succession planning.

Contacting a Business Succession Planning Attorney

Creating a business succession plan is a challenging and multidisciplinary task. One needs to consider family relationships, personal future goals, taxes, and other legal matters involved while making a solid succession plan. To learn more about your legal options and how you can create a succession plan for your business, consider contacting an experienced New York estate planning attorney at Jennifer V. Abelaj Law Firm today by calling 212-328-9568 to schedule a consultation.

Valuation Of Hard To Value Assets

It is difficult to determine the value of hard to value assets, hence their name. Hard to value assets, also referred to as HTVAs, can make appraisals in estate planning and business valuation more complicated and time-consuming. There are different methods for valuing hard to value assets, but the appropriate methodology depends on the type of asset and the circumstances surrounding the valuation. A consultation with a knowledgeable estate planning attorney may be beneficial for a proper and accurate valuation of hard to value assets. At the Jennifer V. Abelaj Law Firm, we assist clients in New York with a wide range of estate planning needs. You can request more information by calling 212-328-9568 and scheduling a consultation.

Methods for Valuing Hard to Value Assets

The methods for valuing HTVAs differ from one case to another. Choosing the appropriate methodology requires a thorough understanding of appraisal regulations and available valuation approaches. When selecting the method for a valuation of hard to value assets, it is vital to consider the purpose of the valuation, the asset’s competitive properties, and the nature of the local market. When valuing HTVAs, appraisals need to apply a comprehensive framework, follow the accepted guidelines, use professional judgment, and consider all factors to ensure an accurate valuation.

A Guide to Valuation of Hard to Value Assets

As mentioned, the appropriate method for valuing hard to value assets depends on the type of asset and reason for the valuation. For example, is the valuation necessary as part of a sale, gift or death.  What follows are general guidelines for valuing these HTVAs:

• Real estate and automobiles
• Stocks
• Bonds
• Life insurance
• Annuities
• Business
• Personal property
• Debts

Real Estate and Automobiles

Often, people seek the help of an experienced real estate agent to estimate the value of their real property. An agent who knows the local market will be able to provide a rough estimate. However, this approach may not work with hard to value real estate. Similarly, certain automobiles, such a collectibles or rare versions, may have a value which depends on whether it is part of a collection.  If the asset requires a more thorough analysis, the owner of the property will most likely have to hire an appraiser and collect all available information about real estate and any automobiles in order to obtain an accurate valuation.

Stocks

Valuing closely-held stocks often involves computing the company’s price-to-earnings ratio. However, an amateur may not be able to determine the value of stocks accurately. If the owner of stocks dies, the personal representative of the decedent’s estate may choose to get in touch with the company that managed the decedent’s stocks or consult with a financial expert well-versed in stock valuation. Title 26 of the Code of Federal Regulations (CFR) § 20.2031-2 provides guidelines for the valuation of stocks and bonds based on selling, bid, and asked prices.

Bonds

The approach to valuing bonds is similar to the method for valuing stocks. Determining the value of a bond usually involves calculating the bond’s cash flow and face value. The individual or firm performing a valuation of a bond may also need to add accrued interest that has not been paid after the decedent’s death.

Life Insurance

When determining the value, the appraiser may calculate the policy’s face value and cash value. The policy’s face value is the amount of money beneficiaries of the policy receive upon the owner’s death. The cash value, on the other hand, is the accrued amount that can be accessed outside of the death benefit.  For life insurance that is part of a gifting transaction, sometimes the value is based on the interpolated terminate reserve (ITR).  The ITR is similar to the cash value, but the calculation is based on various other factors.

Annuities

A valuation of hard to value assets may also include valuing annuities if the decedent owned any. In order to determine the value of annuities, the personal representative of the decedent’s estate may need to contact the company that sold the annuities to valuate them as of the date of the owner’s death.

Business

Often, determining the value of a business is the most challenging part of valuing hard to value assets because businesses may include both tangible and intangible assets and liabilities. A business is also difficult to value if the deceased person was not the only owner of the business. In this case, the personal representative of the estate may need to contact a certified public accountant to estimate the value of the deceased person’s interest. However, business and other valuations may be easier if planned in advance. At the Jennifer V. Abelaj Law Firm, we offer estate planning and business succession planning services tailored to each client’s needs.

Personal Property

Certain types of personal property may be considered hard to value assets. Common examples of HTVAs among personal property include cryptocurrency, digital assets, works of art, jewelry, and antiques. While many people choose to visit eBay and similar platforms for estimating how much personal property is worth, it may be necessary to reach out to an auction house, art museum, gemologist, or other expert who specializes in valuing antiques, artworks, and jewelry.

Debts

According to the Federal Trade Commission, the personal representative of the estate is responsible for settling the deceased person’s debts. Once the valuation of hard to value assets is complete, it is essential to identify all debts that the debtor owes and determine their value. Common types of debt include mortgages, credit cards, loans, and debts associated with the deceased person’s medical treatment prior to the death.

Is an Appraisal Necessary for a Valuation of Hard to Value Assets?

An appraisal may be necessary for some of the hard to value assets mentioned above. Usually, people choose to hire a professional appraiser for an accurate appraisal. It is recommended to request the appraisal as soon as possible after the decedent’s death. A valuation of hard to value assets can become even more difficult if a significant amount of time has passed after the owner’s death. The Date of Death Appraisal is necessary for several purposes, including taxes. The appraisal will be used to establish whether an estate tax should be paid to the Internal Revenue Service (IRS) and to determine the amount of estate tax if any.

Contacting an Estate Planning Attorney

For assistance with the valuation of hard to value assets, consider seeking legal guidance from an estate planning attorney at the Jennifer V. Abelaj Law Firm. We help executors and personal representatives of estates in the efficient settling of the decedent’s affairs, including valuation of the assets. We also assist people with creating a comprehensive estate plan that takes into account the hard to value assets in order to protect them and minimize taxes. To schedule a case review, call 212-328-9568.

Revocable Living Trusts

Revocable living trusts are powerful estate planning documents that can help avoid costly court battles and provide instructions on how certain assets should be managed. Revocable living trusts are created to meet your specific needs, which are discussed during consultation and recommendations by your attorney.

Understanding Common Revocable Living Trust Terms

Revocable living trusts are often complex documents that may contain terms many people do not use in everyday language. Here is a brief list of terms to be aware of when considering forming a revocable living trust:

• Trust—a written document that determines how the grantor’s assets will be handled
• Trustee—the person who manages the trust, which is often the grantor
• Successor trustee—a trustee who takes over when the first trustee can no longer serve in this capacity
• Grantor—the person who makes the trust and maintains ownership of the property while he or she is alive
• Beneficiary—the person who benefits from the assets in trust
• Trust property—any assets that are transferred to the trust, which might include real property, personal property, vehicles, financial accounts, and more
• Revocable—the grantor can alter or void the trust at any time as desired, but when the grantor of a revocable living trust dies, the trust becomes irrevocable
• Irrevocable—the grantor is not allowed to modify or terminate the trust without the approval of a third party named in the trust or court approval
• Living—“living” means that the trust is created during the grantor’s lifetime and becomes effective upon creation; in contrast to “testamentary,” which a trust that goes into effect upon the grantor’s death
• Fiduciary—a person who owes a duty to another person and must put that duty ahead of their own self-interest

What Is a Revocable Living Trust?

A revocable living trust is created during a grantor’s lifetime. It provides instructions for how the trust property should be managed, which may include separate instructions for the grantor’s lifetime, a time of disability, and the time of their death. These instructions can generally be changed at any time, allowing for great flexibility for the grantor to sell assets, change beneficiaries, and make other adjustments as their life changes.

Assets are transferred from the grantor to the trust. The trustee oversees them. When the grantor dies, the trust becomes irrevocable because the trust-maker has died and is no longer able to make changes. Therefore, the trustee must carefully follow the instructions regarding how the trust property should be transferred to the designated beneficiaries.

How Is a Revocable Living Trust Different Than a Will?

Many people hear the terms “revocable living trust” and “will” used together. While both are important estate-planning tools that transfer a person’s property to his or her beneficiaries, there are some key differences, including the following:

• Wills are only effective at the time of death while trusts can go into effect immediately
• Wills must go through probate and are made public while trusts are privately administered and bypass probate
• Trusts can provide instructions on how property is to be managed during the grantor’s lifetime while wills cannot
• Wills allow the naming of a guardian for minor children while trusts do not

Benefits of Revocable Living Trusts

Some of the most important benefits of revocable living trusts include their:

• Timeliness
• Detailed instructions
• Ability to avoid probate
• Privacy
• Flexibility

Timeliness

Revocable living trusts allow a healthy grantor to create an immediate plan for his or her wealth. The trust can also create a set of instructions in case the grantor becomes disabled. This flexibility allows the grantor to potentially avoid the expense and hassle of having a guardian appointed to manage the grantor’s property. Additionally, the grantor can create a plan for after his or her death.

Revocable living trusts allow a healthy grantor to create an immediate plan for his or her wealth. The trust can also create a set of instructions in case the grantor becomes disabled. This flexibility allows the grantor to potentially avoid the expense and hassle of having a guardian appointed to manage the grantor’s property. Additionally, the grantor can create a plan for after his or her death.

Detailed Instructions

Generally, Wills simply state to whom a person’s assets will go after his or her death. There are usually no conditions for how the property will be used. With a trust, the grantor can leave detailed instructions about how trust property is to be used. For example, the grantor can provide provisions about how money for any minor children will be used. A grantor can also allow beneficiaries to live on a property without ever transferring the deed out of the family.

Ability to Avoid Probate

One of the most important benefits of revocable living trusts is that they avoid probate. Probate is a judicial process that involves completing an inventory of the estate, admitting the will, paying off the debts the deceased has at the time of death, and finally transferring assets to beneficiaries. This process is often slow and expensive. Additionally, it can take years for beneficiaries to receive any property that was left for them. Alternatively, trusts avoid the probate process and judicial oversight, so beneficiaries often receive their property more quickly.

Privacy

Wills are entered into public record, so anyone can read the stipulations included in a Will, including who the beneficiaries are and what each beneficiary stands to inherit. This may not be a pressing concern for most individuals, but if an heir is being disinherited or the estate distribution is very personalized, a revocable trust can provide some privacy.  Trusts are administered privately by the Trustee, so they avoid the prying eyes of the public.

Flexibility

The grantor can freely change, modify, or even terminate a revocable living trust as he or she sees fit. This gives greater flexibility in case circumstances change or if the grantor has a change of heart regarding how his or her property will be handled.

Disadvantages of Revocable Living Trusts

Some drawbacks to using revocable living trusts include their:

• Expense
• Lack of tax benefits
• Limited credit protection

Expense

Initially, wills and non-probate transfers may be less expensive than revocable living trusts. However, paying more to set up a trust now may provide greater benefits by allowing the grantor’s estate to avoid probate later.

Lack of Tax Benefit

Because these trusts can be revoked and the grantor maintains ownership interest over the property in trust, there is no tax benefit to using a revocable living trust according to the American Bar Association. 

Limited Credit Protection

For the same reasons as the lack of tax benefit, revocable living trusts may not provide much protection from creditors.

How to Create a Revocable Living Trust

The simplest way to create a revocable living trust is to work with a lawyer who is experienced in this area of the law. The Jennifer V. Abelaj Law Firm can help create a customized trust that meets your specific needs.

Consider the following four steps when preparing to create a revocable living trust:

1. Create an inventory of assets to include in the trust
2. Think about who should inherit the assets
3. Consider what should happen if you were to become incapacitated
4. Transfer the property to the trust once it has been created

Contact an Estate Planning Lawyer

When you are ready to create your revocable living trust, consider calling 212-328-9568 to schedule a consultation with the Jennifer V. Abelaj Law Firm, which is experienced in helping individuals and families create revocable living trusts that meet their particular needs.