Estate Planning FAQs

When clients come into meet with us for the first time, they often have many questions. As with any legal advice, it’s critical to speak with an experienced attorney to learn how different laws and regulations affect your specific situation. But to get you started, our Rochester estate planning lawyers have compiled a list below of some of the most common – and most unique – questions we’ve been asked.

What types of things make a will invalid?

If a will was executed in compliance with state statute, that will is presumed to be valid and enforceable. However, when a will has been executed by a person who was under duress, tricked or incompetent at the time of execution, the will may be invalidated by the court. Proving that a will should not be enforced is difficult and requires a significant amount of evidence.

What should I do if I have a child whom my spouse doesn’t know about?

Whenever you have a confidential issue that you do not want disclosed to your spouse, it is important that you retain separate attorneys to draft your estate plans. An attorney cannot ethically represent both of you, while keeping secrets that affect one spouse’s rights.

It is also important that your will mention the child, even if you do not want them to inherit from you. If you choose to keep this document private, it is important to remember that the executor of your estate will need access to it after you pass away – so choose accordingly.

What happens if my former spouse is still listed as my beneficiary?

It is important after a divorce to update your estate plans and designated beneficiaries so that your assets are being passed according to your wishes. However, if those changes are not made, New York law says that ex spouses listed as beneficiaries will be treated as though they have already passed away, so the assets pass to the next person in line.

What estate planning tools do we need if we get divorced?

In addition to your individual estate plans, it is important for co-parents to make consistent guardianship arrangements. Often, we work with family law attorneys to ensure these arrangements are specified in the separation agreement. Without a common agreement, the last surviving parent’s will controls guardianship arrangements.

What is the United States (federal) estate tax exemption amount for 2011?

At death, all of your assets, including retirement accounts and life insurance proceeds, are gathered together to form your taxable estate. You can pass an unlimited amount of money to a surviving spouse without any estate tax consequences. You can also pass an unlimited amount of money to charities designated under IRS Section 501(c)(3). However, you can only pass $5 million to any other individuals, such as children, grandchildren or unrelated individuals. Spouses can combine their exemption amounts for a total of a $10 million exemption for a married couple. For all assets over $5 million (the exemption amount) that are not passing to a spouse or charity, you will pay estate tax to the Internal Revenue Service at a rate of approximately 35-50 percent.

Does New York state have a gift tax?

No. In New York state, you can make unlimited gifts of cash or other property, without the need to report the gift or pay tax on it. Note that there are United States (federal) gift tax rules and that Medicaid rules may also apply.

What is the United States (federal) gift tax?

For 2011, you can give $13,000 each to as many individuals as you wish. You and your spouse may make joint gifts of $26,000 each to as many individuals as you wish. Gifts at the $13,000 level do not have to be reported to the Internal Revenue Service. Any gifts over $13,000 ($26,000 for joint spousal gifts) must be reported to the Internal Revenue Service by filing Form 709 (United States Gift Tax Return). Each person has a $5 million gift tax exemption, which means that there is no gift tax owed to the Internal Revenue Service until the total of all gifts in excess of the $13,000 (or $26,000) level reaches $5 million. At that point, the donor (the person making the gift) will have to pay gift tax at a rate of approximately 35-50 percent. Note that using up your $5 million gift tax exemption will reduce your United States (federal) estate tax exemption. There is no effect on New York state estate tax, since New York state does not have a gift tax.

What is the difference between Medicare and Medicaid?

Medicare is a federal program which is available to individuals who are 65 years of age and older, as well as certain disabled individuals. Presently, Medicare provides health care for approximately 40 million elderly and disabled Americans without any asset or income requirements. Medicare does not provide coverage for custodial care, which is generally most of the care a nursing home patient receives. Medicaid is a federal program which provides medical care to the poor, to children and to pregnant women living under the federal poverty level. It is funded jointly by the states and the federal government, and is currently administered at the county level.

Contact Weinstein & Randisi

To schedule a free consultation with an experienced Rochester estate planning lawyer, contact Weinstein & Randisi at 585-310-1578 or toll free at 800-768-1780.