HEREDITARY / ESTATE PLANNING
Estate planning is the process of strategizing and arranging a person’s assets in advance with the objective of passing assets to future generations efficiently, without paying unnecessary taxes and avoiding costs, delays, and familial disputes.
Additionally, it is important for every person to have certain documents such as durable powers of attorney, designations of healthcare surrogate, living wills, and designations of preneed guardian. These instruments are designed for a client to delegate certain responsibilities, such as to appoint another person to make medical decisions on his or her behalf, direct whether the client wants to be sustained on artificial life support, designate a guardian for the client’s minor children, and allow other persons to act on behalf of the client in financial or business matters, in case the client later becomes incapacitated or unable to manage their affairs.
From planning for blended families to planning for children with special needs, we apply an individualized analysis of your specific desires so that we can prepare a comprehensive plan for you and your family to achieve certainty, clarity, and tax efficiency.
At The Benhayoun Law Firm, we understand that each client’s individual situation and characteristics is unique, such as the family structure, wealth, special needs, and so forth. As such, we foster individualized and direct relationships with our clients to confidently ensure that all your legal needs are properly managed.
Nowadays, it is very common for members of a family to live in different countries. For example, parents often live in their home countries while their children come to the United States to study, work, and live. In such cases, the inheritance by certain family members, as well as the passing of monies between family members, may cause complex financial and tax situations.
In hereditary planning, it is important to know and comply with the various pieces of legislation and legal provisions that govern a specific matter in multiple countries. Often, the structures which attend to the tax consequences of situations in the United States, are complex and require the collaboration of an expert in United States international taxes and a lawyer or accountant in the applicable foreign country.
Estate planning for foreign persons with assets in the United States is an extremely delicate matter. Non-U.S. persons with U.S. assets have to pay estate tax (of up to 40%) of the fair market value of their U.S. assets (other than exempt assets) at the time of their passing, with the exception of the first $60,000. In other words, if a non-U.S. person has assets in the U.S. that are worth more than $60,000 at the time of his or her death, his or her estate will have to pay estate tax on those assets.
Estate planning is relevant to people in all rungs of the socioeconomic ladder. Everyone needs some level of estate planning. Some people will need a very simple plan with a few simple documents. Other people will need a more complex plan that can include slightly more sophisticated documents such as trusts. And yet other people will require complex plans required to lower or eliminate estate taxes.
Estate planning for people without a taxable estate:
United States persons have an exemption from estate tax which varies year by year. For year 2019 the exemption is of $11,400,000.00. This means that U.S. citizens and permanent residents do not pay estate tax if they have less than that amount at the time of their death (assuming no gifts were made).
In these cases, the goal of an estate plan is to pass our client’s assets to the heirs of our client’s choice in the an efficient manner, and without creating unnecessary obstacles.
For example, one of the most common goals in these cases is to avoid probate. Probate is a court proceeding where the court determines the legal heirs and orders the assets passed to them. This can be a long process and it is all part of the public records.
There are many methods used in estate planning, and they each have their proper use. This is why it is advisable for people to meet with an estate planning attorney to reach his or her individual goals in an efficient manner.
Estate planning for people with a taxable estate:
United States persons who have assets valued at more than their exemption amount, which is $11,400,000.00 in 2019 (not taking into account lifetime gifts) have a taxable estate. This means that upon the passing of that person his or her estate will have to pay estate tax of 40% of the assets that exceed the exemption amount.
It is imperative that persons in this situation are advised by an estate planning attorney who handles taxable estates. One of the primary goals in these situations is to structure the client’s assets in a way that will reduce or eliminate the estate tax.
There are many strategies and methods available for these situations, and their use will depend on many factors including among others, the client’s finances and financial needs, social considerations, family considerations, and personal preferences.
These methods include the use of instruments such as wills, trusts, estate freezes, family limited partnerships, GRATs, QPRTs, ILITs, QTIPs, QDOTs, sales to IDGTs, and SCINs.