August 2011 Archives

The federal gift and estate tax are set at very high levels and only those with multi-million dollar estates are subject to the federal tax. But this does not mean that everyone else gets away tax free. Instead, states usually impose much lower bars for the estate and gift tax to apply, such as the New Jersey inheritance tax.

The federal estate tax exemption is $5 million. This means that estates worth more than $5 million are subject to an estate tax of 35 percent. The federal gift tax exemption is also set at $5 million, and gifts over this amount are similarly subject to being taxed at the 35 percent rate, reports The Star-Ledger.

An estate planning checklist is important so that you can organize your personal and financial information and organize for the estate plan that best suits your situation. Use the checklist to tally your information in the following four categories we suggest. Once you have this information, you should consider speaking with an estate planning attorney to develop the perfect plan for you.

Family Members

To start off, you should list your spouse, children, children’s spouses, grandchildren, and any other family member you may want to provide for. You may be surprised at how quickly your web of relatives expands when you list them out. You may even discover a grandchild or two. You may also want to list out any special circumstances for a family member that may affect estate planning — such as medical conditions, or wealth and poverty.

Did Sarah Berman marry 87-year-old Stanley Lowell just so that she could take over his estimated $400 a month rent controlled apartment? Rent control in New York City is a valuable thing, especially when the market value for similar apartments in the West Village can reach $5,000 a month.

Berman, 63, wed the ailing Lowell last September, reports the New York Post. He died only a month after the marriage, and Berman inherited his cheap rent. However, the landlords of the apartment building doubt that Berman married for love -- instead believing that she conned the elderly gentleman to take over the apartment.

Taylor Armstrong is a cast member on The Real Housewives of Beverly Hills. Her husband was Russell Armstrong. The two were going through a divorce, and Russell Armstrong was apparently unhappy with how the television show was going to portray him, reports Forbes. So he killed himself.

In the wake of Russell Armstrong's suicide, Taylor Armstrong and her deceased husband's family fought over his funeral rights. Taylor Armstrong allegedly did not tell Russell's parents or sister her plans for Russell's burial -- including the time and location of the funeral. The fight may have been due to the fact that Taylor wanted her husband buried in Los Angeles, while his family wanted him back in Texas.

The rich get richer. Last December, Congress passed new estate tax legislation that allows wealthy individuals who die this year to pass on any unused portion of their estate tax exemption to their surviving spouse. The estate tax exemption 2011 potentially allows wealthy widows to pass on $10 million tax free.

Previous to the new law, the estate tax exemption allowed individuals to bequeath up to $5 million of their assets tax free, reports Bloomberg. So, most people could pass on their assets without being subject to the estate tax. However, for those extremely wealthy few who had more than $5 million to pass along, they were subject to giving up a sizable chunk of their estate to Uncle Sam in taxes.

Leona Helmsley famously left $12 million to her Maltese in her will. Alexander McQueen left $81,000 for the care of his English bull terriers in his. And according to a Washington University in St. Louis School of Law study, not just the rich and famous are providing for their beloved pets in their wills.

In fact, the study shows that as many as 27 percent of pet owners may be accounting for their furry friends in their wills, reports Reuters.

When you are 30, you may think people who are 40 are old. When you are 40, you may think people 60 are old. And when you are 80, you may think people who are 90 are old. The point is, you may never think you are old.

However, estate planning is not really about age -- actual age or perceived age. Instead, estate planning is important for everyone, and below we list the top reasons as to why estate planning is important:

Same-sex couples in New York recently celebrated a historic victory winning their right to wed in the state. Along with same-sex marriage, we wrote about the many benefits that come along with marriage within the state.

However, when same-sex couples prepare their taxes next year, they may realize that the IRS doesn't care that New York recognizes same-sex marriage. Instead, the federal government continues their tough stance on gay marriage and taxes.

An article at StockMarketsReview.com suggested that people who own property in Italy draft an Italian will. The article noted that this was important as Italian law requires that an Italian Notary Public publish a will for it to be valid. Presumably, an American will not notarized by an Italian Notary Public would be unenforceable.

Why is this inportant to those who live in New York?

Many New Yorkers own property abroad, whether in Italy or some other country. One fear may that after one dies, your wishes will not be met if the foreign jurisdiction does not recognize your will. According to StockMarketsReview, this can happen in Italy as your property may revert to the state in the absence of a valid will and in the absence of living heirs.

Melissa Gladney of Bedford-Stuyvesant is a recent New York lottery winner. Gladney was lucky enough to win the $1,000 A Week for Life top prize, which appropriately gives her $1,000 a week for life with a minimum prize of $1,000,000.

By winning this particular lottery, the 34-year old healthcare worker has also won some built-in financial planning. Unlike the winners of more conventional lotteries like Power Ball where the winner can choose to take a lump-sum payout or a monthly payment over a period of time, Gladney will get $1,000 every week unless she dies early, in which case the remainder of $1 million will be paid out.